Training - Shipping Risk Management & Derivatives (An Applied Approach)

There is a strong need to understand risk emanating from uncertainties in shipping revenue and expense forecasts. A very high volatility in shipping, which is usually not seen in other industries, is required to be managed through physical as well as derivatives hedging. This basic one day program first builds the foundation in required aspects of statistics and corporate finance in a focused and meaningful way. This is then followed by a number of examples to explain risk management, basis risk, hedging by FFA trading and understanding different types of options.

Course Outline

ØIntroduction to Shipping Risk (Defining Risk, its impact on project assumptions, Revenue, Expenses, Asset Values, Interest Rates and availability of finance for shipping (uncertain margins) and Credit Risk (Static & Dynamic) Understanding Risk Shipping Project Analysis, Relevant statistics (building blocks), Hedging Basics, Portfolio Management Basics (Return versus Risk) Diversification, Basis Risk and its mitigation, Value at Risk Derivative Instruments Types and Examples, Forward Freight Agreements, Physical Versus derivatives hedging, Options Basics, Hedging losses and developing law