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Description of Trading in Oil Futures and Options

Trading in oil futures and options is an introduction to price risk management in the worldwide oil industry. With numerous practical examples, it requires no prior knowledge and should be read by everyone involved in the industry. Although aimed primarily at those new to risk management it will also provide a useful theoretical background to more experienced managers and it will show those in other markets how the oil industry uses futures and other derivatives. This book concentrates on all the risk management tools available to everyone from crude oil producer to refined product consumer and explains the theory of futures, exchange options and over the counter trading.

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Title Information

ISBN:

9781855733879

Pages:

160 pages

Format:

Hardback

Product Code:

12328

Publisher:

Woodhead Publishing

Published:

01/10/1998

Edition:

2nd Revised edition

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About Sally Clubley

Sally Clubley works as an oil price consultant specialising in price risk management. She is a frequent lecturer at the College of Petroleum and Energy Studies in Oxford and elsewhere, and also runs in-house training programmes. For several years she was divisional director at E D & F Man International and was on the Board of the International Petroleum Exchange.

Contents of Trading in Oil Futures and Options

The development of the world oil industry
- Origins of the modern oil industry
- The major oil companies
- The oil industry in the twentieth century
- The oil price rises of the 1970s
- Changing price structure

Oil refining
- The refining process
- Changing patterns of demand and consumption
- The refining industry

The markets
- Physical markets
- The futures markets
- The futures contracts
- Propane
- NYMEX No. 2 heating oil contract
- IPE gas oil contract
- NYMEX leaded gasoline contract
- NYMEX crude oil contract
- IPE crude oil contract
- SIMEX fuel oil market
- Natural gas
- Options
- The paper refinery
- Possible new contracts
- Electronic trading
- The future

Entering the futures market
- The decision to trade
- Choosing a broker
- Clearing
- Futures commissions
- In-house administration
- The mechanics of futures trading
- Open outcry
- Orders

Strategies in futures trading
- Hedging
- Spreads
- Arbitrage
- Exchange for physicals

Options
- Buying options
- Selling options
- Option strategies
- Incorporating physical or futures
- Delta hedging
- Market making in options

Over-the-counter instruments
- Swaps
- CFDs
- Partials
- Trigger pricing
- Options
- Swaptions
- Embedded options

How the oil industry can use the futures markets
- Supply department
- The producer
- The refiner
- The traders
- The marketing department
- The distributor and large consumer
- Exchange or OTC?

Technical analysis
- Point and figure charts
- Line and bar charts
- Analysing the charts
- Charts and the oil industry