Derivatives I Training Course

We will be offering Derivatives I training on-site. If you are interested in
attending, please let Amy FitzPatrick know no later than May 21st.

Derivatives I - Applied Energy Derivatives
Presented by Paradigm Strategy Group

Date: Monday, June 4th and Tuesday, June 5th
Time: 8:00 am to 5:00 pm

This course is appropriate for all employees wishing to obtain a practical
understanding of the basic natural gas and power derivative structures that
are traded and marketed today. An emphasis is placed on understanding how
financial tools are added to physical structures to meet the risk management
needs of clients.

Participants attending this seminar will be able to:

Formulate customer hedge strategies based on a solid understanding of risk;
its impact on capital structures and approaches to its mitigation.
Develop and interpret forward prices in the context of arbitration
disciplines, as well as understand the divergences from these disciplines
that are characteristic of energy prices.
Identify marketing opportunities through an understanding of both the forward
curve and the distortions created by the physical system of production and
transportation.
Assemble the pricing of a transaction from a benchmark price curve.
Devise cost-reducing deal structures for gas storage from an understanding of
price curves and their components.
Exploit differences in locational pricing with insights into the relationship
between basis and transportation/transmission.
Structure a natural gas and power swap to hedge a company's risk position,
explaining its risks and benefits as a risk management tool.
Price a swap from the price curve and customize the structure to meet various
customer needs including earnings, cash flow and embedded financing.
Apply basis swaps to either mitigate locational risk or to achieve a more
favorable risk/reward position by altering the index location.
Attain a fluency in language concepts and hedging application of options.
Package strips of options to create caps, floors and zero-premium collars.
Create structures that provide energy users with sub-index pricing using
embedded options.
Recognize options embedded in common supply contracts and their pricing
implications, including swing, double-ups and index contracts with maximum
prices, etc.