Alternative delivery procedure, Argus, Brent Crude futures contract, Brent futures, calls, coal, coal-fired, consumer, controls, delivery, energy, European Energy Exchange, financial markets, futures, futures market, gas, gasoil, hedging, ICE, liquidity, margins, market risk, Middle East sour crude, natural gas, New York Mercantile Exchange, oil, options, OTC, pICEline, position limits, power, strike price, sulfur dioxide, swaps
Reading Abstract:
***From the book***
Exchange-traded futures and options provide several important economic benefits, including the ability to shift or otherwise manage the price risk of cash and physical market position. As open markets, where large numbers of potential buyers and sellers compete for the best prices, futures markets – such as the TOCOM in Tokyo, the SGX in Singapore, the ICE in London, the EEX in Germany, Nord Pool in Scandinavia, NYMEX in New York, and Intercontinental Exchange out of the United States – allow energy companies to discover and establish competitive prices. Partly because these markets provide the opportunity for leveraged investments, they attract large pools of risk capital. As a result, futures markets are among the most liquid of all global financial markets, providing low transaction costs and ease of entry and exit. This, in turn, fosters their use by a wide range of businesses and investors who want to manage risks.
Reading Contents:
3.1 Introduction
3.2 Key Facts About Futures Contracts
3.3 Futures Options Contracts
3.4 Hedging in Futures Markets
3.5 Oil Futures
3.6 Exchange of Futures For Physicals (EFP) and Deliveries Via Futures Markets
3.6.1 EFPs
3.6.2 The practical mechanics of an EFP transaction
3.7 Coal Futures
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Book Review:
** From Publisher
Energy risk management expert, Tom James, does it again. His latest book is a timely addition to the rapidly developing energy trading markets. This book should be on every energy trader, risk manager and corporate planer`s desk. it is an easy read as Tom goes into great detail to explain the intricacies of this market and its various unique elements. - Peter C. Fusaro, Chairman, Global Change Associates Inc., Best-selling Author and Energy Expert
This sensible and practical guide is essential for those seeking an understanding of commerce in energy derivatives. beyond merely informative, this hand book for the practitioner details the finer points of the use of derivatives as tools for price-risk management. No energy trading desk should be without it. - Ethan L. Cohen, Senior Director, Utility and Energy Technology, UtiliPoint International Inc.
Energy markets are much more volatile than other commodity markets, so risk mitigation is more of a concern. Energy prices, for example, can be affected by weather, geopo9litical turmoil, changes in tax and legal systems, OPEC decisions, analysis` reports, transportation issues, and supply and demand - to name just a few factors. Tom James`s book is a practical guide to assessing and managing these risks. It is a must-read for senior management as well as risk and financial professionals.- Don Stowers, Editor, Oil & Gas Financial Journal
