Course Overview

The objective of this module is to familiarise students with trading risk issues and their management/monitoring. The module will consist of identifying, quantifying and managing risks, directly or indirectly related to price risks. At the end of this section, the participants will have developed their capacity to understand the traders’ approach towards risks and opportunities in the commodity trading industry (with a focus on pricing risks) and understand the elements of risk management techniques in commodity trading.

Course Objectives and Takeaways

• Define and identify risks
• Master hedging techniques
• Understand notions such as Position capture and Mark-to-Market within a commodity trading structure
• Be familiar with option contracts and strategies
• Use and understand the different VaR models: parametric, historical and Monte-Carlo simulations

Course Overview

We are living an unprecedented concurrence of intertwined factors that are driving a profound transformation in commodity markets. The path to net-zero and the decarbonisation of the economy, the remapping of geopolitics, and the digitalisation of the industry, are re-shaping the vision and the strategy of the organisations operating in this industry. In this state of flux, where market participants of all sizes are rapidly transforming their business models to make informed decisions ahead of their competitors, the role of data and information technology has become of extreme relevance as it enables the innovation that underpins both revenue generation ideas, and the reduction of costs and operational risk. 

This interdisciplinary course blends core concepts of data, technology, and business strategy from the perspective of a commodities trading corporation. Participants will gain a solid basis of the theoretical foundations and practical applications of data and technology that demystify data science and artificial intelligence. Each module supports the data-driven decision making that nurtures innovation, and is enriched by real-world examples and applications. The interactive presentations will include fireside chats and panel discussions with senior-level guests from the market who will be sharing their insights and bet practice.

Course Overview

Understanding the mechanism of the main banking instruments used for obtaining financing from financial institutions in order to secure payment and performance in trading of commodities on the international market.

Learning Objectives

• Understanding UCP600 and their usage
• Ability to choose the best payment instrument  for a trader

The practice of commodities trading is the process wherein all Commodity products are exchanged to satisfy current demand. Traders engage in it to remove any inefficiency in the market. In the market for commodities, there is always a way to make a profit with managed risk, and this is via arbitrage where traders play with immediate price differentials.

During this module, students will have the opportunity

• To identify new trading opportunities using Business analysis canva
• To test in a simulation environment their concrete understanding of the trading industry: from the management of cash contract, monitoring of portfolio/positions to hedging cash contracts on exchanges.
• To familiarize themselves with real tools of the industry: Data Management Screen, Order Management System, Document templates from the industry.

Information will be presented in the form of use cases, academic research, articles, and whitepapers published by respected scholars and experts in the field, and the actual disclosures of major multi-national companies in the industry, including service providers, consultancy companies…

Rules of the simulation will be communicated in detail at the beginning of the module through the commodities trading simulation Handbook.

Students will have to connect to many platforms and will receive details for this purpose.

This module presents the various financing methods that are available to the commodity trading companies.

The module first deals with the types of financing which are typically used by or available to commodity trading/distribution companies, such as:

• Transactional Trade Finance;
• Inventory Financing – repurchase agreements;
• Borrowing Base;
• Prefinance and Pre-export finance, which are two different types of financing yet having some common features;
• Payment Risk Assumption (“PRA”) & Credit Risk Insurance (“CRI”), two credit risk mitigating tools that share common aspects but also significantly differ.

The module also covers some other types of financing which can be used by commodity trading companies when they reach a certain stage of development and/or are used by other commodity markets participants (E&P players, mine owners,..), namely: 

• Reserve Base Lending (“RBL”);
• Revolving Credit Facility (“RCF”).

Other types of financing which will be covered in Module 10 include Asset Finance, Acquisition Finance, Bridge Loan and Project Finance.

Course Objectives and Takeaways

Objectives of module 7 are the following:

• give participants an understanding of the various tools/products and methodologies that lenders have developed over the years in order to finance the commodity trading companies, and 
• illustrate how commodity trading companies manage their treasury requirements thanks to such financing tools.

Each type of financing is dealt in a similar manner, i.e. covering the following aspects:

1. Principle & reimbursement sources
2. Parties involved
3. Type of duration
4. Typical risks
5. Securities
6. Challenges for the Lender and the Borrower
7. Advantages for the Lender and the Borrower
8. Nature of the financing
9. Typical structure of the credit facility
10. Legal framework
11. Management – follow up and position keeping.

At the end of the course, the participants will be able to: 

• Understand the specificities of the various financing methods available in order to finance trading companies, some of the technical aspects of such methods, the sources of risks and how to mitigate them.
• Have hints and tips to help choose/decide which type of financing would be the most appropriate depending on the business and related needs of the trading company.
• Be familiar with the specific language of the industry in order to be in a position to exchange with other members of the industry.
• Understand how trading companies manage their treasury requirements thanks to the use of the various financing methods covered.

Course Overview:

The objective of this course is to provide students with an overview of expectations towards corporations active in commodity trading in the area of responsible business conduct. It will examine international standards, with a special focus on business and human rights and what is expected from companies and how it should be implemented in commodity trading. Looking at the latest developments in business and human rights in commodity trading it will provide students with tools to address this increasing concern and to avoid potential adverse impacts of corporations.

Course Objectives:

• Understand expectations towards companies in the area of responsible business conduct
• Understand responsibilities of commodity trading companies in the area of business and human rights
• Analyse challenges in responsible business conduct in commodity trading
• Analyse potential negative human rights impact in commodity trading activity
• Develop proposals for enhancing responsible business conduct in commodity trading

• Understanding of the trading workflow. The students will be able to identify the different steps of a trade from the sign-off of the contract to the delivery of the goods. They should be able to integrate in this analysis the specificities of the different commodities
• Understanding of contracts set-up (incoterms, etc.). The students should be able to link the different documentations to the contract. At the end of the module, they will be able to list the documents used on specific trades as shipping documents. They will be able to identify the right Incoterms according to the trading strategy and the impact of an incoterm choice on trading operations / documentation