Course description
New: Crude Oil, Natural Gas & Carbon Emissions Options Volatility Trading Masterclass - Simulation Based - Virtual
This interactive options training programme will provide participants with the knowledge to trade volatility in crude oil, natural gas and emissions markets. Market data, pricing models and a unique volatility trading simulator ('Volcube') are used extensively throughout the course. Delivered live online by experienced options traders, the course is broken down into 4 half day sessions over 4 days (with a break day in the middle). For those wishing to attend who are completely new to the subjects of options and volatility, a selection of primer training material will be available on the ICE portal in advance of the course commencement. Emphasis is placed on practical skills, risk management, and understanding the nature of volatility in energy (and energy related) contracts. We will examine how to choose the correct strategy to suit market conditions and risk/reward requirements. Complex subjects such as delta-neutrality and gamma trading will be addressed in simple and practical terms, via current real-world examples.
Course participants will undertake live-market exercises on an options pricing model (ICE Connect and ICE Options Analytics). You will also be provided with access to our volatility trading simulator (Volcube) for a period of six weeks during and after the programme. participants can improve their skills via self-assessment, feedback and a calibrated 'Trader Performance Index'. The breakdown of performance metrics (available privately to each delegate) is a key element in the development process.
Upcoming start dates
Suitability - Who should attend?
This course would benefit:
Oil and Gas Production and Refining Companies (private/state/public), Crude Oil, Gas and Emissions Traders, Global Commodity Companies, Risk Management Personnel, Sales and Marketing Executives, Energy Purchasing/Consuming companies, Production and Refining Companies, Financial and Treasury Department Personnel, Banks, Brokers, Hedge Funds, Regulators, Proprietary traders/CTAs/Family Offices, Graduate Training Programmes
Training Course Content
Day 1
Quick overview of option basics - why use options instead of futures/forwards/swaps? Redefining options - learning to think in multi-dimensional terms. Option pricing: how do the main inputs affect option prices and which is the most important? Exploring synthetic options and understanding how we can 'recycle' an option position. Interpreting and analysing volatility (the key variable): examples, exercises and analysis of current market conditions. Using a pricing model to generate 'what-if' simulations. Understanding option 'skew' and what it is telling us (specifically in energy related markets). Why do we see different skews in crude, natural gas and emissions? Using ICE Connect analytical software to study historical and implied volatility - is current volatility cheap or expensive?
Day 2
Understanding delta (the first of the option sensitivities (the 'Greeks'): worked examples and exercises in crude oil, natural gas and carbon emissions. Introducing 'delta-hedging' and how we can isolate and trade vol as an asset in its own right. Examination of further sensitivities: vega and theta (measuring our exposure to volatility shifts and time decay). First look at Volcube - simulations and gameplay with participants taking on the role of a volatility trader/market-maker (including risk-managing an option portfolio).
Day 3
Option strategies: hedging an underlying physical or futures position (outright options or the 'collar'/'fence'). Examination of speculative strategies: straddle, strangle, call spread, put spread, ratio spreads. Developing a 'decision tree' - which strategy suits our view, our risk appetite? Running 'what-if' scenarios on the pricing model. Simulations/gameplay involving outright options and strategies. Learning to trade long gamma: adjusting our delta-hedges to profit from volatility. Using ICE Options Analytics to calculate breakeven levels on 'long vol/long gamma' positions
Day 4
Examples and exercises regarding further strategies: low cost, high-payoff 'exact tailoring' spreads: butterflies and condors. Understanding the directional nature of volatility in energy: real-world experience overriding theory. Positioning ourselves correctly for current futures and volatility levels in anticipation of the next move. Time spreads: creating and risk-managing long vega/long theta positions to profit from time decay. Group exercises to decide on strategy based on current outlooks. Further simulation games
Course delivery details
For diary scheduling, please note that the course runs over 4 days, but we provide a break day in the middle so the live sessions will take place on Monday, Tuesday, Thursday & Friday in the week of the course. Wednesday is a break day.
This virtual course is one of the ICE Education LIVE programs. We provide three phases to the course:
- Pre-course: Access to the ICE Education learning platform for on-demand primer content.
- Live Virtual Sessions: Trainer led live video sessions (as per the outline below). These are short focused sessions with practical activity and interaction throughout.
- Post-course: On-demand content remains available and an optional live video clinic session is scheduled for one week post course for any learning points you'd like to revisit.
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Intercontinental Exchange - Open Courses in Commodities and Financial Markets
Intercontinental Exchange's diverse markets span futures and options on interest rates, commodities, indexes and FX, as well as equities and equity options. These markets are relied upon by international market participants, along with our post-trade infrastructure. ICE is uniquely positioned...
The trainer was knowledgeable and engaging. Thank you for your patience.