There are still places available on the Baltic Exchange’s Freight Derivatives and Shipping Risk Management as well as Advanced Freight Modelling & Trading courses in London (9-10 & 11-12 October). The popular two day courses are led by Professor Nikos Nomikos and Professor Amir Alizadeh from the renowned Centre for Shipping, Trade & Finance at Cass Business School. 

Click here for full details, including bookings.

Freight Derivatives & Shipping Risk Management, London, 9-10 October
 
Introduction to shipping risk – Types of shipping contracts
– Sources of risk in shipping
– Market segmentation and sectoral differences
– Comparison of risk across different shipping markets
A primer on risk management

– Introduction to derivative instruments
– Forwards, futures, options & swaps
– Exchange-Traded vs Over-the-Counter
– Credit risk and clearing
Freight rate risk management – Freight market information
– The practicalities of FFA trading
– Documentation and settlement
– Electronic trading
– FFA and hedging examples for spot, time-charter & tanker routes
– Exercise on freight risk management
Freight rate options – Option terminology
– Using freight options for hedging
– Option trading strategies
– Freight options pricing
Bunker risk management – Bunker market fundamentals
– Importance of bunker risk management in shipping
– Use of bunker derivatives
– Forward bunker contracts: hedging and trading
– Options on bunker prices
– Exercise on bunker risk management
Financial risk management in shipping – Interest rate risk
– Financing examples and sources of interest rate risk
– Instruments to manage interest rate risk
– Hedging interest rate risk using forwards and futures
– Interest rate caps, floors and collars
– Interest rate and currency swaps & swapations

 

Case study on shipping risk management

 – Integrating all aspects of shipping risk
– Presentation of the case
– Using spreadsheets to solve the case
– Discussion

Ship price risk management

 – Portfolio theory
– Diversification and risk-return optimisation
– Baltic Sale & Purchase Assessment, Baltic Demolition Assessment, Sale & Purchase Forward Agreements

 

Value at Risk (VaR) in shipping

  – Estimating volatility – daily vs yearly
– Measuring and estimating VaR: single asset vs multi-asset portfolio
– VaR methodologies
– Examples of estimating VaR of FFA portfolios

Credit risk in shipping

 – Probability of default vs loss given default
– How to measure credit risk: qualitative vs quantitative methods
– Credit risk and credit ratings
– Credit risk measurement in shipping
– Credit derivatives and credit risk management in shipping
 
Advanced Freight Modelling & Trading, London 11-12 October
 
Introduction to the Freight Market – Freight contracts
– Characteristics of the freight market
– Relationship between spot and time-charter freight rates
Forward Freight Agreements (FFAs) – Practicalities of trading
– Hedging & trading examples
Spot Price Dynamics – Mathematical models for freight rates
– Mean reversion, seasonality & jump diffusion models
– Estimating & 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
Modelling Freight Rate Volatility – Volatility models: historical, time varying and implied
– Estimation & interpretation
– Forecasting volatility
Pricing Freight Options – Determinants of options 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 t/c)
– Option to lay-up
– Real options & ship valuation
– Real options & 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 of Asian options
Value at Risk of Shipping Freight Rates – Estimation & interpretation