Course Summary

Weather is the single most important factor in influencing price volatility, volume fluctuations and revenues in the energy industry, as well as other industries globally. While exchange traded futures and options and many OTC products can be used to limit price risk, they do not provide a hedge against the volume risk associated with unpredictable weather patterns. This workshop provides a comprehensive overview of weather derivative products. After completing this course, delegates will be able to qualify and quantify weather risk in their businesses and determine the specific weather derivative tools necessary to protect revenues from Mother Nature.

8 CPE credits awarded for this course.

Delivery Method: Group-Live

Who Should Attend?

This one-day workshop is perfect for those who are already familiar with basic hedging strategies with futures and options but require a volume focused approach to risk management. Delegates include everyone from trade staff to senior management from any industry with an exposure to earnings volatility through adverse weather conditions.

Prerequisites

Princeton Energy Programme’s Fundamentals of Energy Futures, Options I - Fundamentals of Energy Options, and Energy Risk Management or equivalent experience.

Pre-classroom Study

As part of our blended learning package, this workshop has a specific web-based course which is recommended as pre-classroom study. Upon registering for the workshop delegates will receive details of how to access the web-based course. Access to the web-based course is included in the price of the classroom course. To optimize your classroom experience, it is recommended you take the appropriate online study as close to the classroom date as possible. The recommended pre-classroom study for this workshop is PrincetonLive.com's A Guided Tour of Commodity Derivatives.

Course Contents

• How weather derivatives differ from weather insurance and other derivatives
• Heating and cooling degree day calculations
• Anatomy of a weather derivative contract
• Quantification and qualification of weather risk
• Weather risk management tools
  • Defined events
  • Seasonal degree day swaps
  • Floors, caps and collars
  • Embedded agreements
• Overview of pricing methodology
• Weather derivative regulation and accounting requirements globally