Online Training Programs

Energy/Electricity Futures, Options, and Derivatives

Six Session On-Demand Training Program with Extensive Live Q&A
Equal to a 1.5 Day Classroom Seminar
Available Now. (60 day access)

How This Training Program Works

This proven online training program is for energy and electric power professionals who are looking for a comprehensive and clearly explained understanding of natural gas, oil and electricity financial instruments, the markets they trade in, and how these powerful tools can be used to manage risk and structure profitable transactions.

This proven online training program features the same material used in the popular PGS in-person classroom seminar. Register today and join the over 10,000 industry professionals who trust PGS for their energy training needs.

Training Sessions

Session 1: Introduction to Energy & Electricity Commodity Markets

71 minutes - Available Now.

What You Will Learn

  1. The structure, function and terminology of spot, cash, and forward natural gas, oil, and electricity commodity markets, and what energy derivatives are.
  2. The three different types of forward energy markets (futures, financial over-the-counter & physical) and how these markets relate to each other including the differences between physical and financial natural gas and power.
  3. An overview of the large and private ICE OTC over-the-counter electronic energy market and the importance of liquidity. 
  4. How forward financial markets reduce risk and add value for energy consumers, producers and electric generators.
  5. An overview of the large and private ICE OTC over-the-counter electronic trading platform, the importance of liquidity, and what "clearing a trade" means with the CME Clearinghouse and ICE CLEAR.
  6. The difference between brokers, FCMs, traders, dealers, market-makers, marketers, power marketers, and wholesale energy merchants, and how they make their money.
  7. The meaning of "bid/offer spread" and other transaction terminology.
  8. The difference between price and "basis" risk.
  9. Why the hedging needs of energy producers and end-use consumers are different from those of energy marketers, oil refiners and gas/coal fired electric generators.
  10. The difference between price and spread hedgers.
  11. What liquidity risk is, and why it is a critical issue for energy markets and traders.
  12. The structure, function and terminology of spot, cash & forward natural gas, oil and electricity markets, and what energy derivatives are.

Session 2: Introduction to Energy Futures Contracts and Exchanges

72 minutes - Available Now.

What You Will Learn

  1. The difference between physical and cash settled energy futures contracts and why the same financial instrument can have ten different names.
  2. Why the futures market is a game of virtual promises, how futures trading adds value to the industry, why trading is a zero sum game, and why futures trades do not directly affect delivered physical volumes.
  3. A summary of energy futures contracts and how the CME-NYMEX and ICE Futures Exchanges operate.
  4. How the "ICE" and CME-Globex trading platforms work, and how trades are cleared through the CME Clearinghouse and ICECLEAR.
  5. How cash margining and your futures brokerage account works, and how cash management/funding risk can blow up even prudent hedges.
  6. What energy and electricity commodity swaps/cfds are, and how these instruments are similar to financial futures contracts.
  7. An overview of the large and private ICE OTC over-the-counter electronic energy market, the importance of liquidity, how the "ICE" and CME-Globex trading platforms work, and how trades are cleared through the CME Clearinghouse and ICECLEAR.

Session 3: How To Hedge Energy/Electricity Price and Basis Risk

156 minutes - Available Now.

What You Will Learn

  1. Why energy companies financially hedge.
  2. The difference between price hedgers and spread hedgers.
  3. How to create buyer and seller futures hedges with physically AND financially settled futures contracts and swaps.
  4. The many real-world issues that can impact futures hedging.
  5. What basis risk is, and how "basis blowout" can destroy a buyer's or seller's futures hedge.
  6. How to hedge energy and electricity price risk with powerful CME and ICE financial futures contracts.
  7. How to use a basis swap or financial futures contract to hedge natural gas and electricity locational basis risk.
  8. How to hedge both basis and delivery risk using trigger deals.
  9. What components make up the master hedging & trading equation, and what the difference is between financial and physical locational basis "fin" versus "phys".
  10. The basics of heat-rate-linked power transactions and why this technique is uch a powerful electricity risk management and deal structuring tool.

Session 4: Introduction to Energy & Electricity Options

90 minutes - Available Now.

What You Will Learn

  1. What energy and electricity options are and why they are so valuable.
  2. The meaning of "puts", "calls", "intrinsic value", "time value", "deep out-of-the-money" and other options-related terms.
  3. Why capacity payments, demand charges, and reservation charges are just another name for option premiums.
  4. The characteristics of the CME-NYMEX, over-the-counter, and physical options markets and how they differ from each other.
  5. The difference between American, European and Asian-style options.
  6. How CME-NYMEX-traded energy options are bought and sold.
  7. Why one should never "early exercise" an American-style CME-NYMEX or physical options.
  8. How to hedge price risk with energy option by creating price caps, floors & collars.
  9. How a buyer can create a price cap using CME-NYMEX call options (An example).
  10. The three trade-offs that must be considered when hedging with options.
  11. How buyers and sellers can create a "No Cost" price collar using CME-NYMEX options (An example).

Session 5: Introduction to Energy Trading and How to Trade Around Assets

Available July 2nd

What You Will Learn

  1. The many different types of energy and electricity trading, why traders specialize, and the different ways energy traders can get an "edge" on the competition.
  2. What the rationale, concepts and mechanics are for basis trading, spread trading, and trading around assets.
  3. How the many types of energy, electricity, and asset-based trading can be summarized by one simple three dimensional graph. 
  4. Why merchant energy and electric power assets such as firm transmission capacity, storage, processing, and generating plants are valuable Call options on spreads, and how access to these assets give energy traders a significant advantage.
  5. What asset “optionality” and "trading around assets" mean.
  6. What the terms "Contango" and "Backwardation" mean, and how the energy “carry trade” works.
  7. A simple rule that will optimize your daily decisions on whether to use or idle assets such as firm transmission capacity, energy storage, gas processing, or natural gas/coal electric generating plants.
  8. A detailed example of how to hedge and trade around firm transmission capacity. This example can be easily adapted to optimizing the income of energy storage, processing, and electric generation assets. 

Session 6: How Energy Marketers Make Money Buying Under-Priced Options From Their Customers and Suppliers

Available July 2nd

What You Will Learn

  1. A brief overview of puts, calls, and basic option terminology.
  2. What a cash-settled European "swing" option is, and how it works.
  3. How to calculate annualized volatility, and why there can be immense price risk in the physical energy and electricity markets.
  4. Why energy commercial players often undervalue energy options and leave money on the table through lost opportunity.
  5. How energy marketers make money from commercial players mispricing risk.
  6. A basic structured transaction (Example #1)
  7. How a marketer can by valuable put and call options for "10 cents-on the dollar" from the marketer's customers and suppliers.(Example #2)
  8. The powerful money-making potential of extendible transactions. (Example #3)

Who Should Attend

Among those who will benefit from this training program include energy and electric power executives; attorneys; government regulators; traders & trading support staff; marketing, sales, purchasing & risk management personnel; accountants & auditors; plant operators; engineers; and corporate planners.

Types of companies that typically attend this training program include energy producers and marketers; utilities; banks & financial houses; industrial companies; accounting, consulting & law firms; municipal utilities; government regulators and electric generators.

Prerequisites and Advance Preparation

This fundamental level online training program has no prerequisites. No advance preparation is required.

Why Choose PGS?

PGS training programs are known for their clear explanations and in-depth content. Register today, and join the over 10,000 industry professionals who trust PGS with their energy training needs.

Instructor

John Adamiak
President PGS Energy

John Adamiak is President and Founder of PGS Energy Training and an expert in energy derivatives and electric power markets. Mr. Adamiak is a well-known and highly effective seminar presenter who has over 20 years experience in the natural gas and electric power industries. His background includes 15 years as a seminar instructor, 9 years of energy transaction experience, and 6 years of strategic planning and venture capital activities. John's academic background includes an M.B.A. degree from Carnegie Mellon University.

On-Demand Access Time

The on-demand training presentations are available for a total of 60 days from the time any one of the training presentations is first viewed. After 60 days, your access to the on-demand presentations will expire. However the PDF formatted training program slides and other documents you receive are yours to keep.

Program Pricing

 PGS online training programs are known for their clear explanations and in-depth content.
 
On-Demand Six Session Online Training Program With Extensive Live Q&A
Equal to a 2 Day Classroom Seminar
Available Now. (30 day access)

$1,295 for the first attendee, $795 for the second attendee, and $495 for each attendee thereafter

Payment and Cancellations

Payment is required prior to training program access. Payment can be made by Visa, Master Card, American Express, or corporate check. Your credit card will be charged at the time of registration unless other arrangements have been made.

Cancellations for online training programs can be made before the program access instructions are sent by PGS, and cancellations will result in a credit. For more information on PGS policies regarding administrative matters and complaint resolution, please contact our offices at (440) 853-1038.
PGS Energy Training · 26 Teal Lane · Hilton Head Island, SC 29926
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