This course is designed to be taken after Freight Derivatives & Shipping Risk Management, but is suitable for experienced freight traders.

This advanced two day module focuses on pricing freight options, modelling freight rate dynamics and pricing options on freight. It covers constructing forward curves on freight, modelling freight rate volatility as well as hedging and trading strategies using FFA and freight options.

Course Brochure 2020
 

Course leaders
Prof. Amir Alizadeh   Centre for Shipping, Trade & Finance  Cass Business School
Prof. Nikos Nomikos Centre for Shipping, Trade & Finance Cass Business School


The course leaders, Prof. Amir Alizadeh and Prof. Nikos Nomikos of Cass Business School, are both internationally recognised academics in the fields of shipping and commodity finance, and risk management. Their theoretical and applied research work has been published in leading academic and professional journals and they also provide consultancy services to the industry on different aspects of commodity and shipping risk management.


To book a place please email [email protected] or call +44 (0)20 3326 8465/8460

"This course, through its knowledgeable instructors, delivers an invaluable understanding of the critical, yet often under-utilised function of risk management as it pertains specifically to the various aspects of the maritime sector."

Kyle L. Young, Bunker Manager, Heidmar

Day One

Introduction to the freight market

  • Freight contracts
  • Characteristics of the freight market
  • Relationship between spot and time-charter freight rates

Forward Freight Agreements

  • Practicalities of trading
  • Hedging and trading examples

Spot price dynamics

  • Mathematical models for freight rates
  • Mean reversion, seasonality and jump diffusion models
  • Estimating and setting up models

Forward curves

  • Forward curve construction

Technical analysis & freight trading

  • Chart analysis
  • Technical trading rules
  • Spread trading
  • Implied TC rates

Risk management using options

  • Freight options
  • Hedging with options
  • Option trading strategies

Day Two

Modelling freight rate volatility

  • Volatility models: Historical, time-varying and implied
  • Estimation and interpretation
  • Forecasting volatility
  • Pricing freight options
  • Determinants of option prices
  • Pricing Asian options using closed-form models
  • Monte Carlo Simulation

Real options in shipping

  • Key option value drivers
  • Different types of real options
  • Option to choose (spot vs time-charter)
  • Option to lay-up
  • Real options and ship valuation
  • Real options and extended Net Present Value
  • Identifying & valuing real options in shipping

Writing and risk management of option positions

  • Option price sensitivities (Greeks)
  • Dynamic & Static Delta Hedge
  • Delta-Gamma hedging
  • Greeks & Asian options

Value at Risk of shipping freight rates

  • Estimation & interpretation
  • VaR methodologies
  • VaR for nonlinear instruments

 

Terms and conditions

The Baltic Exchange must be in receipt of full payment prior to the day of the training course or your nominated delegate(s) may not beallowed entry to the event. Cancellations 14 days prior to the event will be refunded at 50% of the delegate fee. Cancellations within 14 days cannot be refunded. All cancellations must be received in writing.

Names of delegates may be changed at any time without charge and notification of name changes should be made in writing. Registration fees include lunch and refreshments and course notes.

Further questions

Please contact Bill Lines on: 
Tel:  +44 (0)20 3326 8460

Email:  [email protected]

Previous Attendees

Run since 2005, this course has been attended by a huge range of shipowners, charterers, brokers and financial institutions with an exposure to the bulk shipping markets. These include:

A Bilbrough & Co
Aalborg Portland
ABN Amro Futures
Aegean Baltic Bank
AET Tankers
AgriService
Alfred C Toepfer International
AM Nomikos
Amarante Shipping
Ammagi
Anglo American
Aquila Maritime Management
ArcelorMittal Treasury
Archer Daniels Midland
Arista Shipping
Augustea Shipping Services
AWB Ltd
AWB Singapore
Bank of Ireland
Bank of Nova Scotia
BHP Billiton
BHP Billiton Marketing Asia Pte
Bibby Line
BIMCO
BNP Paribas
BP
BP Shipping
Brave Maritime
Brunei Gas Carriers
Bulcom
Business Intelligence Group
Calyon Asia Shipfinance
Cape Tankers
Castalia Fund Management (UK)
CBH Group
CC Maritime
Chandris (Hellas)
China Navigation Co
Chinese Maritime Transport
Clarksons
Clipper Bulk
Clipper Group A/S
Coal & Oil Company
Commodities
ConocoPhillips International
Constellation Energy
Conti Reederei
Copenship
Copersucar
CSAV Norasia Liner Services
CSL Asia Shipping
CSL International Inc.
D’Amico Dry
Dae Yang Shipping
Dome Chartering
Drax Power
DVB Bank
Dynacom Tankers
Eastport Maritime
Eastern Bulk Carriers
EDF Trading
Eitzen Bulk
Electric Power Development Co
Emarat Maritime
Emirates Ship Investment Co
Enel Trade
Energy Argus
Equinox Maritime
Excel Maritime Carriers
Fednav
Femis
Financial Conduct Authority
FinnFleet Tankers
Fitch Risk
Fokus Bank
Foresight
GE Transportation Finance
Genshipping
Gestion Maritime
Getax Ocean Trades
GFI-ACM
Glencore
Global Harvest Trading
Glory Ship Management
Golden Ocean Management
Great Eastern Shipping Co
Grindrod
Harmony Shipping
Heidmar
HF Navigator
Hochu Petroleum
Holbud
Holman Fenwick Willan Singapore
HSBC
HSH Nordbank
Hua Dao Shipping (The East)
Iino Shipping
Intermar
Ispat Industries
J. Lauritzen USA
Jiaotong University
John F Dilon
Klaveness Asia Pte Ltd
Kredittbanken ASA (Osloavd)
Laskaridis Shipping
Leros Management
Lykiardopulo
M2M Management
Maersk Tankers
Maritime 24
Maritime and Port Authority of Singapore
Masterbulk
McTaggart Shipping & Management
Mercator Lines (Singapore)
Merrill Lynch Commodities
Midship Marine
Mitsui OSK Bulk Shipping (Europe)
Mitsui & Co
Mitsubishi Corp
Mittal Shipping
Motia Compagnia di Navigazione
MT Maritime Management
MUR Shipping
Murmansk Shipping
National Bank of Fujairah
Navico International
Newlead
Nexus Management
NIBC Bank
Nidera Handelscompagnie
Norden
Nordic Bulk Carriers
North of England P&I Assoc
NorthEdge Risk Services
Nuon
NYK Bulkship (USA)
Ocean Tankers
Oceania Impex
Odin Marine
Olam International
Oldendorff Carriers
OSG Ship Management
OW Bunker
Pacific Basin
Pacific Rim Shipping
Phoenix Bulk Carriers
Poten & Partners Inc
Prime Marine
PT BCA Tbk
Qawareb Ship Management
Quadra Commodities
RAG Trading
Redpath Sugar
Reuters
Rio Tinto
Rio Tinto Shipping (Asia)
Royal Bank of Scotland
RWE
San Miguel Corporation
Scanmills
Scottish Power
Seasure Shipping
Seatrek Trans
SGX
Shell
Sims Metal Management
Singapore Exchange
Siva Bulk Shipping
SK Corporation
SK Shipping Co. Ltd
Sociedad Naviera Ultragas
Standard Chartered Bank
Statoil
Suek
Summit Maritime
Tailwind Shipping
Taipan Shipbrokers
TBS Shipping Services
Teekay
The Lion Group
Thoresen & Co. (Bangkok) Ltd.
Thurlestone Shipping
Torm
Torvald Klaveness
Total Gas & Power
Tradition Financial Services
Trafigura
Transcenden Global
Transglobal Chartering
Triworld
United Arab Shipping Company
Veson Nautical Corporation
Viterra
Wallem Commercial Services
Waterfront Chartering
West Asia Maritime
Western Bulk
Worldscale
Zim