The GFMI Commodity Market Course
Commodities have certainly seen their highs and lows over the past few years and some of the price moves have been quite abrupt! Whether oil or copper, the markets are keeping everyone on their toes. At GFMI, we designed our Commodity Markets course using a hands on approach on examining the factors that impact the prices of commodities, the features and characteristics of the different markets, pricing, applications, and risks.
Commodity Market Course Objectives
After successfully completing our Commodity Market Course, participants will be able to:
- Identify the various types of commodities with primary focus on energy and metals
- Describe the features and characteristics of commodities
- Differentiate between spot, forward and futures trading
- Explain and calculate pricing
- Compare and contrast investing and trading commodities
- Identify the risks associated with commodities
Program Level: Foundation
Advance Preparation: None
Recommended CPE Credits: 7
Commodity Market Course Sessions
- Session 1: Introduction to Commodity Markets will teach students how to identify major commodity groups, markets, and participants. They will also learn how to differentiate between spot, forwards, and futures markets, as well as explain why commodities are different than other financial contracts. The characteristics of delivery methods, fungibility, and liquidity in the commodity markets will be discussed.
- Session 2 focuses on Pricing Commodities. After completing this session, participants will be able to successfully identify components of a forward price, calculate a forward price, and define and apply forward curves. They will be able to explain the concepts of backwardation and contango, as well as the economic and political variables that are impacting prices. Benchmarks will be identified and discussed.
- Session 3: Speculating, Hedging, and Investing will analyze and identify risk exposures, and recognize whether these exposures are short or long term. Different methods and products used to hedge risk exposures will be analyzed. Participants will be taught how to apply different products, such as forwards, futures, swaps, and options, to hedge commodity risk exposures. Market makers will be discussed, as well as recognizing why commodities are treated as a distinct asset class. The session concludes with a discussion of common commodity indices, contrasting the most popular ones in today’s market.
- The final session of our Commodity Market Course, Session 4: Identifying the Risks and Risk Measurements Used in Commodities will teach participants how to decompose risk into their components parts, as well as define and calculate simple Value at Risk, or VaR. They will also learn how to identify risks such as market, credit and counterparty, liquidity, and volatility.