Commodity Markets and Structured Commodity Finance

London Financial Studies
Training overview
2 days
On-site / Company-specific

Course description

Commodity Markets and Structured Commodity Finance

Commodity Markets and Structured Commodity Finance - 2 day Course

Commodities have experienced lots of changes over the last 25 years: after a decade of stagnant prices in the 1990s followed by a large rise in the years 2000 all the way into 2008 and a collapse at the time of the financial crisis, the price behavior since the end of 2008 has been commodity-specific.

In the world of today’s low energy prices, trading strategies have to be more subtle and should be organized around spreads, term structure of forward prices. In the case of crude oil and natural gas, the geography of the different markets needs to be comprehended In order to build strategies. For agricultural commodities, weather risk continues to be the main source of risk, together with credit.

This comprehensive 2-day program focuses on understanding price formation, management of spot and derivatives commodity positions and investing in commodities. It provides an in-depth analysis of financial instruments; issues of delivery when warehouses are bought by strategic players; and investment opportunities going forward in the world of commodities, in particular the rewarding activities of Trade Finance and Commodity Inventory Finance.

The content is designed for traders in financial institutions, managers in pension funds and insurance companies, risk executives and corporate managers in charge of raw materials purchase.

All delegates will receive a copy of Professor Geman's reference book "Commodities and Commodity Derivatives: Modeling and Pricing for Agriculturals, Metals and Energy"published by Wiley Finance.

Who should attend?

This distance Commodity Markets and Structured Commodity Finance executive education program is designed for financial market professionals.Those best suited for this program will likely work as:

  • Commodity traders
  • Hedge fund managers
  • Investment bankers
  • Energy company risk managers
  • Insurance companies
  • Industry Executives

Training Content

Executive education topics for this distance Commodity Markets and Structured Commodity Finance course are divided by day and include:

Day One

Fundamentals of Spot and Forward Commodity Markets

  • Outlook of Commodity Markets
  • Price Formation in Commodity Spot Prices
  • Commodity Exchanges: The Old and the New
    • The Importance of Liquid Indexes for the Growth of Derivatives
    • Shipping as an Important Part of Commodities Trading
    • Trade Finance as a Profitable Activity
    • Bill of Lading and Letters of Credit
    • Commodity Inventory Finance: Famous losses involving major banks
  • Inventory and Commodity Spot Price Volatility
    • Theory of Storage and Convenience Yield
    • Carry Trade Relationship and Shape of the Forward Curve
  • Margin Deposits and Margin Calls in Futures Trading
  • Futures and Forwards
  • Swaps


  • Base Metals
    • Aluminium
    • Copper
    • Nickel, Tin, Lead, Zinc
    • Iron Ore and Steel
    • The London Metal Exchange
    • Warehouses and Recent Delivery Problems
    • The New Exchanges: Shanghai, Singapore
  • Precious Metals
    • Gold over the last 10 years
    • Silver
    • Platinum, Palladium and their specific risks


  • Crude Oil and Oil Refined Products
  • Oil Forward Curves over the last ten years
  • Changes in the Forward Curve and Trading Strategies

Case Study: Hedging Strategies for an Industrial Producer/Consumer

Day Two


  • Natural Gas, Shale Gas and LNG
  • Coal and the contrasted situation across major countries
  • Electricity and its current sources. The example of Germany
  • Uranium
  • Rare Earths, Cement and Raw Materials. The case of China

Risk Management of Commodities and Raw Materials

  • The Use of Options to Hedge or Get Exposure to Commodity Prices
  • Plain Vanilla Options on Futures
  • Traded Average Price Options (TAPOs) and Average Rate Swaps on the LME
  • Exchange and Spread Options
  • Volatility Skew/Smile in Commodities
  • Valuation of Physical Assets. The example of a Power Plant, an Aluminium Smelter, a Gas Storage Facility

 Agricultural Commodities

  • Weather Risk and Country Risk in Agricultural Commodities
  • Hedging Agricultural Risk with Weather Derivatives
  • Fertilizers and Fertilizer Swaps
  • Volatility in Corn and Wheat Prices
  • Coffee, Cocoa, Sugar
  • Water as a Crucial Commodity

Investing in Commodities

  • The different vehicles
  • Structured Notes on Commodities
  • Investing in Shares of Commodity - Mining companies
  • Mergers, Acquisitions and IPOs in the Mining world
  • The Challenges in building and managing a Commodity Index
  • Commodity as Collateral


The cost of the Commodity Markets and Structured Commodity Finance distance training course is available upon request.

All delegates will receive a copy of Professor Geman's reference book "Commodities and Commodity Derivatives: Modeling and Pricing for Agriculturals, Metals and Energy" published by Wiley Finance.

Certification / Credits

London Financial Studies is registered with CFA and GARP Institute as an Approved Provider of continuing education programs. GARP & CFA Institute members attending this course are eligible for 16 CE/CPD credits. 

About London Financial Studies

London Financial Studies

Global markets move quickly, evolving continuously and deepening in complexity. Over the past decades London Financial Studies has provided specialist executive education programs and short courses focused exclusively on global capital markets. Preparing only the highest quality and most relevant...

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