MKP9520

Commodity price risk management

Lecturer to be advised

6 points · Block mode · Distance education mode

Objectives At the completion of this subject, students will have the ability to understand the importance of price risk management; undertake risk sensitivity analysis; determine risk profiles; have a thorough knowledge of the mechanics of the various price risk management instruments; evaluate the various collective methods to manage price risk; use fundamental and technical approaches to price forecasting; be able to use Internet for obtaining and analysing price information; implement proper organisational risk management procedures; know the regulatory environment for commodity trading and the operation of future and options markets; use profitability profiles to compare alternative price risk management instruments.

Synopsis This subject studies price risk trade-offs, cost of protection, calculates risk exposure, and risk ranking; demand and supply curve shifters, inventory balance sheets, data collection and analytical tools used in price forecasting with fundamentals; price charting techniques, trading systems, and analytical software; tactics in contracting, trading procedures, and order execution; techniques to measure basis risk; portfolio management, basis contracts and HTAs, advanced options strategies, and over-the-counter products; company risk profiles, corporate risk management charters, procedures in corporate risk management; and the use of advanced analytical methods to rank price risk management strategies.

Assessment Group presentation: 5% · Two assignments (3000-4000 words each): 45% · Examination (3 hours): 50%

Prescribed texts

Schroder B and Williams J Agricultural commodity price risk management Oxford University Press, 1998

Back to the 1999 Business and Economics Handbook