Curricula

Individual training programs carried out on the Entrima platform:

·Fundamentals of commodity markets pietei marfurilor (130 min, exam)

1. Asset classes – Types of markets

About fixed-income, equity, real estate, FX and commodities

Concerning risk-reward ratios and risk appetite

2. Commodities & commodity markets

About metals, softs & energy, but also freight, carbon & fibres

Covering relationships

3. Production, storage, transport & consumption – Up-, mid- & downstream

Concerning various types of capacity

Including availability and utilization

4. Market participants & their role

About commodity trading firms & investors

Covering risk diversification

5. Spot & forward markets – Physical & financial products

Covering the concept of price volatility

Specifics concerning electricity & natural gas - Balancing

6. Commodity derivatives – Contract specifications & settlement

Physical delivery & cash settlement.

Delivery period & delivery moment

7. Pricing of commodities – Price driving factors

Fundamental & non-fundamental price driving factors

Price analysis, including seasonality & mean-reversion

8. Commodity markets vs. Financial markets

Differences and similarities between the characteristics

A comparison is made concerning markets, products & pricing

9. The role of speculators

About the impact of speculators on price levels

Concerning politicians, policy makers & regulation

·Fundamentals of energy trading (340 min, exam)

1. Liberalisation of the Energy Markets

What is aim of liberalisation? What are the consequences?

2. Risk

Risk and return; the risk-reward ratio; quantification vs. qualification.

3. Market risk

About price risk.

4. Risk management

Identification of risk, measuring risk and control of risk.

5. Volatility

The concept volatility explained; calculation & interpretation of volatility figures.

6. Counterparty risk

Credit risk and delivery risk.

7. Credit risk management

Clearing; netting; credit limits; ratings; sleeving; systemic risk.

8. Liquidity & Liquidity risk

Market liquidity vs. funding liquidity.

9. The trading function

The role of trading business unit.

10. The trading organisation

Front, Middle & Back Office.

11. Trading

What is it and how is it organised?

12. Trading – The reasons for concluding transactions

About procurement, sales, balancing, hedging, arbitrage and speculation.

13. Pricing – The order book

How does trading take place? How are prices set? What orders are executed? When? How?

14. Trading – Order types

What order types are applied and for what reasons?

15. Trading process – Clearing

Central counterparty; clearing house & members; credit risk; margining & collateralisation.

16. Trading process – Settlement

Physical delivery versus cash settlement; settlement procedures.

17. Trading process – Transaction flow

Pre-trade, trade & post-trade processes; tasks & responsibilitis of front, mid & back office staff.

18. Trading process – ETRM system

Energy trading and risk management software; users and purposes.

19. Markets & Products – Spot vs. Forward markets

Spot/prompt vs. forward/futures markets.

20. Markets & Products – Derivatives

What are derivatives? What are they used for? And by whom?

21. Markets & Products – Forwards vs. Futures

What are the differences?

22. Markets & Products – Contract for difference

What is a CFD?

23. Markets & Products – Swaps

What is a swap?

24. Markets & Products – Options

What is a (call/put) option?

25. Trading platforms – OTC markets & trading

How is OTC trading organized? What are master agreements?

26. Trading platforms – Brokerage services

What is a broker? Inter-dealer brokers vs. broker-dealers.

27. Trading platforms – Exchange trading

What features does exchange trading have? How is it organized? Fee structure.

28. Trading platforms – Trading screens & platforms

What details are relevant to traders?

29. Pricing, price drivers & indexation

What factors drive prices? What is an index?

30. FX markets & trading

Exchange rates, Forex exposures; the role of the treasury department.

31. Accounting – Valuation

Bookkeeping & accounting rules; M-to-M.

32. Accounting – Book structure

How do firms organize internal transfers? What is a book structure? How is accounted for P/L?

33. Terminology – Upstream, midstream & downstream

Explanation of the terminology which is related to the value chain.

34. Terminology – Opening & Closing + Long & Short

What do the concepts of long or short imply? And opening or closing?

 

·Power trading – basic level (200 min, exam)

The power value chain

About electricity generation & consumption

Covering transmission in a nutshell

Power generation – Facilities & their characteristics

About power plants, efficiency, carbon intensity & ramping rates

Concerning cost of investment & maintenance and marginal cost

Gross processing margin – Spark & dark spread

About the margin of gas-fired and coal-fired power plants

Concerning dispatch, tolling cost and negative margins

Transmission – Cables, TSOs & balancing

About electricity transmission & congestion management

Concerning the role of TSOs and balancing regimes

Power pricing – The merit order

About supply & demand and the ranking of marginal cost levels

Concerning power consumption – Profiles & shaping

Power products

Power-specific products (15min.blocks; baseload; peak products)

Concerning the difference between spot and forward markets

Renewables – Impact on pricing

About wind & PV – Imbalances & shifts in the merit order

Concerning uncertainty with respect to production forecasts

Dispatch – Allocation of facilities, impact of weather & trading

Re the allocation of generation capacity and/or trading power

Concerning decision making processes at dispatch units

Market coupling – Cross-border transport capacity

About market coupling throughout Europe & its consequences

The optimal flow of power & trading for delivery the day ahead

10.Daily auctions – Price curves & matching

About pricing - supply and demand stacks at auctions

Concerning bidding strategies for generation capacity

 

·Power trading – intermediate level (150 min, exam)

Forward power markets

1. Power forward markets

Convering the differences between spot & forward markets.

About price volatility in spot & forward markets; mean reversion.

2. Power exchanges & brokers

About OTC markets and trading venues for power.

Concerning market liquidity, notional value and open interest.

Power term contracts

3. Power forwards & futures – The varieties

Concerning the most commonly known contracts.

The time-to-maturity and delivery moment/period.

4. Power forwards & futures – The application

Covering asset-backed trading as well as proprietary trading.

About managing power-related exposures.

5. Power forwards curves – Pricing of power forwards & futures

About contango & backwardation, including seasonality.

Covering the convenience yield.

Hedging of power exposures

6. Hedging power production & consumption capacity

About procurement & sales on a forward basis; contract mgt.

Covering assuring future cash flows by price fixation.

7. Hedging power transmission capacity

Locking in potential margins on a forward basis.

Covering location spreads; what these are & how to trade these.

Settlement of power term contracts

8. Settlement of power forwards & futures – Part 1

Including physical delivery & cash settlement.

Covering nomination & periodic invoicing.

9. Settlement of power forwards & futures – Part 2

Concerning the process of cascading.

Covering the consequences of it for the power portfolio

 

·Power trading – advanced level (170 min, finalizat cu examen)

Power portfolio management

1. Accounting – Book structure & internal transfers

About internal transactions & prices, including premiums.

Concerning book structures, cost allocation & P/L responsibility.

Covering upstream, midstream & downstream activities.

2. Customer portfolio

About power supply contracts; including load forecast.

Concerning circumstances, e.g. weather, economic situation.

3. Physical power assets

About make-or-buy decisions & asset-backed trading.

Aggregation of rights & obligations (prod., cons. & settlement).

Power derivatives & flexibility

4. Power swaps – Physical settlement

Concerning solutions for problem solving in the physical world.

About basis swaps, or location swaps.

5. Power swaps – Cash settlement

About financially-settled agreements, including indexation.

Concerning fixed-for floating contracts.

6. Power options – Outright options

About tradable contracts in the OTC markets & on exchange.

Pricing of power options; intrinsic value plus time value.

7. Power options – Application for hedging purposes

About hedging natural short/long positions with call/put options.

About power price caps & floors.

8. Power options – Embedded optionality

About volume flexibility & swing optionality in supply contracts.

Covering structuring and structured deals.

 

·Power trading – expert level (170 min, finalizat cu examen)

Power risk management

1. Power risk management – Value-at-risk of a power position

About the a commonly applied method to quantify an exposure.

Covering the relevant time horizon and confidence level.

2. Power risk management – Risk off-set due to correlation

About statistical data and concepts, and how to apply these.

Concerning pairs or proxies.

3. Power risk management – Value-at-risk of a power portfolio

About the quantification of aggregated power positions.

Considerig opposing long/short positions & correlated positions.

4. Power risk management – Off-setting risk (opposing exposures)

About risk off-setting and netting.

Covering portfolio integration and cross-margining.

Modeling flexibility

5. Modelling – The real option approach

About production capacity & transmission capacity.

About management decisions, such as the right to dispatch.

6. Modelling – Physical power assets as real options

Considering power generation cap. & power transmission cables.

About call options on the spark/dark spread or location spread.

7. Modelling – Complexity: Valuation & hedging of spread options

About structuring, including exotic options.

Including spread option valuation models, e.g. Margrabe.

8. Modelling – Optimizing the hedges

About hedging strategies, e.g. proxy-hedging.

Concerning dynamic risk management; Delta-hedging.

9. Modelling – Weather elements (precipitation & wind data)

About the impact of renewables on the power markets.

Hydro: Precipitation, cascading, pump storage.

Wind: Concerning temperature, location, direction, wind roses, diurnal cycle,

pressure gradient force, coriolis force, friction.

Completion webinar:

• A recap of the online courses that have been followed to embed the materials in a solid manner

•  Flexibility in power portfolios

• Optionality in contractual power assets and in physical power assets.

• How to monetise/capitalise this flexibility/optionality

• How to manage this flexibility/optionality