The NYSE Liffe Education Programme offers a range of commodity workshops:

• Introduction to Futures & Options
• Technical Analysis
• Options
• Advanced Options

Futures

• Understanding the basics of a futures contract and trading on a recognised exchange (e.g. Liffe);
• The role of a ‘Clearing House’ (e.g. LCH.Clearnet);
• Volumes, open interest, settlement and delivery;
• Why use futures?
• Accessing the markets;
• The basic factors for pricing a futures contract;
• Using futures to hedge exposure to an underlying commodity;
• Speculation using futures;
• Terminology – including, “How to place a futures order into the marketplace”;
• Trading Tools: fundamental and technical analysis, quote vendors (news service, pricing and data providers), analytical software and execution software; and
• Using the markets as an information source: ‘What do futures markets tell you?’

Options

• Understanding the basics of an options contract;
• Develop an intuitive understanding of the element of choice and other dimensions;
• Why use options?
• Pricing an option contract – intrinsic value and time value;
• An explanation of volatility - and how it affects option prices;
• Using options to hedge exposure to an underlying commodity; and
• Using options to speculate - plus an explanation of the common speculative strategies – straddles, strangles, call-spreads and put-spreads.

There will be exercises, Q&A sessions and demonstrations throughout the day.

Day 1:

• History / background to Technical Analysis;
• Does it work? - Are there examples of patterns in human behaviour?
• Dow Theory: “Prices Discount Everything”;
• Classical chart analysis -
  • Trendlines
  • Channels
  • Support and Resistance
  • Pullbacks / Retesting
• Types of chart -
  • Line Chart
  • Bar Charts
  • Japanese Candlesticks
• A closer examination of Candlesticks - the K2 preference;
• Dow Theory revisited - the need for confirmation;
• Trendlines and Volume;
• Continuation Patterns -
  • Triangles
  • Flags and Pennants
  • Wedges
• Reversal Patterns -
  • Head and Shoulders
  • Double / Triple Tops and Bottoms
  • Retracements
• Gaps -
  • Common Gap
  • Breakaway Gap
  • Runaway Gap
  • Exhaustion Gap
• Dow Theory revisited again – the need for further confirmation; and
• Non-Text Book Thinking (Lateral Thinking?)

Day 2:

• Revision of day 1;
• Mathematical Indicators;
• Moving Averages -
  • Simple Moving Averages
  • Weighted Moving Averages
  • Exponential Moving Averages
  • Comparing Moving Average to price
  • Moving Average Crossover Technique
• Momentum Indicators -
  • Bollinger Bands
  • Relative Strength Indicator
  • Stochastics
• Waves, Numbers and Cycles.
  • Fibonacci Retracements
  • Elliot Wave Theory
• Market Profile; and
• Back-testing various technical analysis methods to see which best suit the delegates products and style of trading.

There will be exercises, Q&A sessions and demonstrations throughout both days - using both historic and current prices.

Day 1

• Group discussion about options in an everyday context. Examination of the differing risk / reward dimensions for buyers and sellers - plus the basic elements that combine to construct an options contract;
• Why use options? Protection, yield enhancement, gearing and exact tailoring for special situations;
• Option price and value: intrinsic value and time value;
• What are the basic factors for pricing an option?
• Pricing models - a brief explanation;
• Hedging and delta;
• An examination of “synthetics”: a call = a put;
• What do option prices tell us? Using option prices as an information source;
• "Skew" - the difference between theoretical and actual market prices; and
• Basic option strategies.

Day 2

• Demonstration of a pricing model using current data and live Liffe option prices;
• Examination of various strategies and their outcomes with regard to current / historic prices and events;
• Delegates act as a team to decide option strategies appropriate to their own needs;
• "The Greeks" i.e. the commonly used terms to express option price sensitivities in relation to the underlying price, time, volatility and interest rates;
• Re-usable options: Never exercise an un-hedged / speculative option.

There will be exercises, Q&A sessions and demonstrations throughout both days - using both historic and current prices.

It is recommended that delegates attending this course have previously attended the 2-Day Options workshop or have a sound knowledge of Options trading and methodology.

• Mathematical basis and interpretation of volatility;
• Calculating volatility / option prices in commodity markets (using a pricing model);
• Isolating volatility -
  • how does volatility behave?
  • volatility and skew
• Trading volatility -
  • the decision-making process
  • comparing historical and implied volatility
  • is volatility “cheap” or “expensive”?
  • exploiting “cheap”/ “expensive” volatility
  • vega and theta revisited
  • gamma “rent” and “alpha”
• “Classic” volatility trades -
  • buying volatility: back-spreads, straddles and strangles.
  • selling volatility: butterflies and condors
  • ratio spreads, ladders, christmas trees
• Analysing an option portfolio using a pricing model – examining “what if?” scenarios.
• Analysing / simplifying a portfolio intuitively: isolating and managing risk.

There will be exercises, Q&A sessions and demonstrations throughout the day - using both historic and current prices.