Course description
ICE Education and Two Two Five bring their expertise in the physical and derivative LNG and Nat Gas markets and electronic trading to bring to you this innovative program that utilises a revolutionary trading simulator that ensures practical hands on experience of 'real market scenarios' in a unique learning experience.
Delivered live online in eight 2-hour sessions over 4-days (with a Break day in the middle), the trading concepts will be decoded in a bite-sized manner to reveal the key methodologies and intricacies behind them.
In addition, you will be able to practice what you have learnt by playing realistic trading scenarios via a unique trading simulator allowing you to experience the psychological challenges a trader has to endure daily.
Suitability - Who should attend?
The course is designed to give an overview of the LNG markets and the evolving trading and marketing business surrounding them. Attendees will come from all areas of the Natural Gas industry who wish to get a better understanding of the current situation and who wish to gain insights how these markets may evolve.
- Gas Trading
- Risk Management
- Supply, Transport and Operations
- Sales and Marketing
- Energy Purchasing
- Management and Financial Accounting
- Strategic Planning and Economics
Training Course Content
Session 1:
Derivatives: What is trading and why do companies trade. The major gas hubs. What is a gas derivative? What is the difference between forwards, futures, swaps, and options? Explains some trading terminology. How a futures exchange works. How traders use gas derivatives.
Simulations: 2 trading simulations where delegates will be able to trade futures, swaps, and forwards
Session 2:
Trading Best Practice: What is risk? The different types of risk - price, credit, operational, reputational. How risk can be managed successfully by a trader. Technical analysis. How risk is measured, what is VAR and how is it used. Trading lessons - common pitfalls.
Simulations: 2 trading simulations where delegates will be able to trade NBP, ZBR, PEG, TTF and NCG futures within a VAR trading limit.
Day 2
Session 3:
Time Spreads: What is spread trading/different types of spread. Principles of spread trading. What a forward curve is and market structure. Different types of market structure and what they signify. How traders use time spreads.
Simulations: 2 trading simulations where delegates will be able to trade NBP and TTF futures within a trading limit.
Session 4:
Pricing Exposures: What is physical LNG trading. Why trade physical LNG. Physical LNG trading issues. Factors that influence supply. Factors that influence demand. Natural Gas/LNG quality. Contractual considerations. Explains floating prices and benchmark prices. LNG price risks - oil v gas. Managing LNG price risks.
Simulations: 2 trading simulations where delegates will be able to trade JKM, TTF, Brent and Henry Hub futures.
Day 3:
Session 5:
Nat Gas Arbitrage: : Explains physical arbitrage utilising gas pipelines. Trading geographical spreads. Costs to move gas. Valuing pipeline capacity. Optimisation of pipelines.
Simulations: 2 trading simulations where delegates will be able to trade around pipeline capacity between THE and TTF markets.
Session 6:
Nat Gas Storage: What is storage? Why companies might want storage. The costs associated with storing natural gas. Valuing storage. Optimisation of storage. Types of market structure. How to hedge a storage play. Intrinsic and Extrinsic Value.
Simulations: 2 trading simulations where delegates will be able to utilise withdrawal and injection rights to store TTF and NBP gas and apply hedges to capture a storage play.
Day 4:
Session 7:
LNG Arbitrage: Explains physical LNG arbitrage. Contractual delivery terms. LNG cargo lifecycle. Time charter. Port and canal costs. Operational costs of arbitrage. Financial risks. When traders arbitrage. Netback calculation. Managing arbitrage price risks.
Simulations: 2 trading simulations where delegates will be able to trade American, European and Middle Eastern LNG cargoes, charter vessels and manage price risk exposures.
Session 8
LNG Hedging: Why hedge? Basis risk. Futures as hedging instruments. JKM swaps as hedging instruments. Hedging considerations. Types of hedging. A detailed example of hedging fixed price cargoes. A detailed example of hedging floating price cargoes. Futures or swaps? Dirty or imperfect hedging.
Simulations: Up to 3 trading simulations where delegates will be able to apply arbitrage and unwinding hedges and charter vessels as LNG cargoes price in/out.
Course delivery details
Each concept features:
1. An interactive digital pre-read featuring videos, tutorials, and quizzes to reinforce your understanding of the concept. This will take 1-hour to complete
2. A 2-hour live online session hosted by a former trader who talks through the concept in detail, and how it's applied in the real world. The delegate to TwoTwoFive facilitator ratio is kept at a maximum of 4:1 to ensure every delegate can be coached during the trading simulations. The live online session is streamed twice per day: 8 am - 10 am (London)/3 pm - 5 pm (Singapore) and 11 am - 1 pm (London)/6 pm - 8 pm (Singapore) on a Monday, Tuesday, Thursday & Friday (Wednesday is a Break day).
3. Access to the unique trading simulator with fellow course attendees to practice trading
4. A knowledge check. On completion of the course, a pass certificate and 24 CPD will be awarded.
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Intercontinental Exchange - Open Courses in Commodities and Financial Markets
Intercontinental Exchange's diverse markets span futures and options on interest rates, commodities, indexes and FX, as well as equities and equity options. These markets are relied upon by international market participants, along with our post-trade infrastructure. ICE is uniquely positioned...