Commodity Risk Management
Theory and Application
Routledge – 2013 – 406 pages
Commodity Risk Management goes beyond just an introductory treatment of derivative securities, dealing with more advanced topics and approaching the subject matter from a unique perspective. At its core lies the concept that commodity risk management decisions require an in-depth understanding of speculative strategies, and vice versa. The book offers readers a unified treatment of important concepts and techniques that are useful in applying derivative securities in the management of risk in commodity markets. While some of these techniques are well known and fairly common, Poitras offers applications to specific situations and links to speculative trading strategies - extensions of the material that not only are hard to come by, but helpful to both the academic and the practitioner.
The book is divided into three parts. The first part deals with the general framework for commodity risk management, the second part focuses on the use of derivative security contracts in commodity risk management, and the third part deals with applications to three specific situations.
As a textbook, this book is designed to appeal to classes at a senior undergraduate/MBA/MA levelof training in Finance, financial economics, actuarial science, management science, agriculturaleconomics and accounting. There will also be interest for the book as: a monograph for research libraries, a handbook for individuals working in the commodity risk management industry, and a guidebook for those in the general public interested in topics like farm risk management or the assessment of hedging practices of publicly-traded commodity producers.
I. Commodity Risk Basics 1.1. The Commodity Risk Landscape 1.2 History of Commodity Risk Management 1.3 Recent Commodity Derivative Debacles II. Commodity Risk Management Concepts 2.1 Measuring Risk and Exposure 2.2 Optimal Risk Management Decisions 2.3 Strategic Risk management III. Risk Management Applications 3.1 Base Metal Mining 3.2 Oil and Gas Exploration and Development 3.3 Airlines and Jet Fuel Hedging
Geoffrey Poitras is a Professor of Finance at Simon Fraser University, Vancouver, Canada. In addition to working as a securities analyst with the Bank of Canada in Ottawa, where he served as Government of Canada Treasury bill and bond auction manager, Professor Poitras has authored seven books and numerous peer reviewed journal articles. His research interests focus on: applied financial econometrics; security analysis; the use of derivative securities in risk management and speculation; business ethics; and the history of financial economics.