Price Risk Management using Futures & Options
In today's increasingly competitive marketplace, downstream flexibility can be achieved in part by predicting and managing upstream risk. This comprehensive, three-day course focuses on practical application and is essential for any farmer or agri-business leader whose production (outputs) or raw materials (inputs) are commodity based.
Structure of the On-line Course:
The course is structured into seven subject units. A written text is provided for each unit as are additional references. Each unit has examples of potentially real situations and applied assignments.
At least seven interactive live session are held to "cover" the material using GoToMeeting. To maximize learning, these sessions will be held over three weeks, three the first week and two each of the following weeks.
In summary, in both programs you will learn:
- How to set up an account and trade Futures and Options
- Hedging for Futures & Options, using realistic examples
- How to understand the technical analysis and information inside charts to improve your timing
- Practice applying your knowledge to current market case assignments
- Learn everything you need to know to develop a strategy
- The course includes up-to-date analysis and practice so that you may apply your new knowledge to current markets
“The course opened the door to the commodity futures world. Well worth the time and the money."
- Gary Erickson, Manager, Grain Transactions, CSP Foods
Key Areas for learning:
- Risk Management: Market risk, causes and prospects for the future
- Mechanics of Futures Trading: The basics of futures trading: The futures contract, long and short positions, open interest and volume, the margining process, types of orders, and convergence of futures and cash prices
- Hedging with Futures: The concept of hedging is introduced, short and long hedge and examples are provided. The relationship between gains and losses on futures and prices I the cash market are investigated.
- Cash-Futures Price Relationships: The importance of basis in hedging is illustrated. This is done by defining basis, investigating factors that affect it and showing historical basis patterns for Canadian products.
- Uses of Futures and Basis for Sellers and Buyers of Commodities: Defines and illustrates five different applications of the information in futures and basis that can be used by either either sellers or buyers of commodities.
- Commodity Options –Define Puts and Calls, strike prices, premiums and what determines them. Explains risk management using options in comparison to risk management using futures.
- Technical Analysis: Identifying trends, reversals, gaps, moving averages, relative strength indices, MACD’s, channels and how they can be used in risk management.
- Developing a Marketing or Purchasing Plan Using the techniques covered in the course to develop objectives, trading rules and how to mesh them with your financial requirements.
“It’s great having instructors who are so genuinely keen that their students learn. The course content was challenging, but was made accessible through patient instruction.”
- Holly Buchanan, Vice President, Buchanan Trading Inc
Dr. Larry Martin
Principal & Lead Instructor Agri-Food Management Excellence
Larry Martin, lead instructor, publishes and speaks internationally on all aspects of futures trading, agricultural competitiveness and international trade. He is considered an expert on trade issues surrounding agricultural commodities and has been consulted by many companies and organizations in North America and Europe.