Agenda

Singapore, Singapore
10 May - 11 May, 2018


DAY 1

OVERVIEW OF THE WORLD COFFEE MARKET

  • Production and consumption trends
  • The current trade market

COFFEE PRICE DEVELOPMENT AND WHY

  • Robusta VS Arabica
  • Today’s market in a historical context
  • External influences to monitor
  • Weather factors and climate change

ADVANCED FUTURES AND OPTIONS IN PRACTICE

  • Derivatives and risk management
  • Exchanged trade Vs OTC
  • Futures Contracts-standardized and tradable
  • New York Arabica Coffee “C”
  • London Robusta Dollars
  • Market participants and their roles in transfer of risk
  • Exchanges and Clearing houses
  • Calculating margins
  • Key players and their influence - hedgers, speculators, brokers

FUTURES TRADING PRACTICAL KNOW-HOW

  • Opening
  • Closing: Delivery or cash settlement
  • EFP’s
  • Rolling

PRICE RISK MANAGEMENT WITH COMMODITY FUTURES

  • Buying and selling commodities-cash/physical market, forward futures, and options
  • Hedging with commodity futures
  • Risk transfer
  • Strategy basics
  • Convergence of futures and cash at expiry
  • Differentials (basis risk)
  • Spreads/Cash and Carry

APPLYING THIS TO COFFEE

  • Technical analysis Vs Fundamentals
  • Order flows
  • Currency impacts
  • Investor sentiment
  • CFTC Reports

MARKET STRUCTURE-SPREADS AND THE FORWARD CURVE

  • Contango/Carry Structure
  • Backwardation/Inverse Structure
  • Storage and warehousing
  • Certified Stocks and age penalties
  • Certification programs
  • Other considerations: quality, on time delivery
  • Grading and Sampling considerations

DAY 2

COFFEE OPTIONS

  • Key concepts involving the use of puts and calls
  • Key considerations in determining the price of puts and calls
  • Volatility explained: what is the significance of historic VS implied volatility?
  • Cost considerations

 

PRACTICAL STRATEGIES FOR USING PUTS AND CALLS IN COFFEE TRADING

  • Long only
  • Spreads, straddles, credit and debit spreads
  • Synthetics
  • Basic and intermediate option strategies for producers and roasters
  • (collars, fences, 3-ways)
  • Calendar spreads
  • What to be mindful of

MANAGING THE FUTURES SPREAD (ROLLING)

  • Approach in a carry market (producers/users)
  • Approach in an inverted market

THE GREEKS-ADVANCED OPTION PRICING MECHANISMS (DELTA, GAMMA, THETA AND VEGA)
WHAT ARE THE GREEKS

  • The basics of managing option strategies using Greeks
  • What option structures have a more practical application

MONITORING STRATEGIES—KEEPING AN EYE ON COFFEE EXPOSURES MANAGEMENT OF HEDGE POSITIONS

  • Market to Market
  • Margin call risk in options
  • Reporting of positions

Summary and Key Take-Away Points
PLUS, Strategy development and case studies