Course
Coal Markets and Risk Management
From the mine to the forward curve: physical coal, derivatives, hedging and risk measurement.
About 8 hours of self-paced study, plus live sessions
Enrol to unlock every lesson, simulation, live session and your CPD certificate.
Enrol01The physical coal market
Session 1 · Guillaume PerretWhat coal is, how quality drives value, where it is mined and shipped, and why the power sector still depends on it.
- Coal types and qualityCoal is not one product: types, end uses and the specification parameters that set its price.Interactive15 min
- Supply, demand and trade flowsWho exports, who imports, the political risks behind supply, and Perret Associates' live supply-demand balance.Interactive15 min
- Coal in the power mix and the dark spreadCoal remains the first source of electricity worldwide. How utilities compare coal and gas economics.Interactive15 min
- Module quiz 6 questions · 70% to pass
02The steam coal derivatives market
Session 2 · Guillaume PerretWhy hedge, how coal swaps work and settle, the main indices and their methodologies, and who trades them.
- Why companies (don't) hedgeThe ten classic objections to hedging, and the answers.10 min
- How a coal swap settlesFixed-for-floating swaps, monthly settlement against an index, and what happens when you close a position bilaterally.Interactive15 min
- The main coal indicesAPI2, API4, globalCOAL NEWC, Indonesian HBA and 4,200 GAR, CFR China and Indian composites.15 min
- Market structure and historyPrincipals, OTC brokers, exchanges, the rise of clearing, and 25 years of market milestones.15 min
- Module quiz 6 questions · 70% to pass
03Hedging in practice: group case studies
Sessions 3–4 · Guillaume PerretSix real-price case studies: speculation, utility procurement hedges, mining offtakes, floating-price sales, arbitrage and forward-curve spreads.
- Case 1: A hedge fund takes a positionBuying API2 Q1 at $53/t: P&L profile, closing out, cleared vs uncleared cash flows and monthly settlements.Interactive20 min
- Case 2: A utility hedges its coal procurementPower sold forward creates a short coal position. Hedge with API2, then buy the physical: net delta and basis risk.Interactive25 min
- Cases 3–4: Mining offtakes and floating-price salesA trader with a fixed-price NEWC offtake, and a South African miner selling at floating API4.Interactive25 min
- Cases 5–6: Arbitrage and forward-curve spreadsTrading NEWC vs API4 when the spread is extreme, and selling a steep backwardation.Interactive20 min
- Module quiz 6 questions · 70% to pass
04Clearing and exchange trading
Session 5 (guest: ICE Endex) · Paul GroesWhy the market moved to clearing, how a clearing house removes counterparty risk, and how initial and variation margin flow.
05Forward curve, price forecast and mark-to-market
Session 6 · Guillaume PerretDaily valuation of positions, the difference between a forward curve and a forecast, and what backwardation and contango tell you.
- Mark-to-marketValuing every position daily against the forward curve: mechanics, benefits and pitfalls.Interactive15 min
- Forward curve vs price forecastTwo different tools for two different jobs.10 min
- Backwardation and contangoReading the shape of the curve, convenience yield and roll yield.Interactive15 min
- Module quiz 6 questions · 70% to pass
06Case study: Metallgesellschaft
Session 7 · Guillaume PerretA $1.3 billion derivatives loss: stack-and-roll hedging, basis risk, funding liquidity and governance.
07Introduction to options
Session 8 · Guillaume PerretCalls and puts, payoff diagrams, the drivers of premium, Black-Scholes and the Greeks, and options hidden in physical contracts.
- Calls, puts and payoffsOptions as insurance: the vocabulary and the shape of the P&L.Interactive15 min
- What drives the premium: Black-Scholes and the GreeksIntrinsic and time value, volatility, and a live option pricer.Interactive20 min
- Selling options and options in physical contractsWhy sell options, how it goes wrong, and the free options buried in physical deals.10 min
- Module quiz 6 questions · 70% to pass
08Coal market outlook
Session 9 · Guillaume PerretHighlights of Perret Associates' short-, medium- and long-term view (June 2026), including the impact of the Iran crisis.
09Introduction to technical analysis
Session 10 · Guillaume PerretUsing price history to frame trading decisions: support, resistance, trends, moving averages, RSI and MACD.
10Understanding risk management indicators
Session 11 · Guillaume PerretLessons from trading disasters, then volatility, correlation, delta, Value-at-Risk, and how not to be fooled by them.
- Lessons from trading disastersMetallgesellschaft, Barings, LTCM, Enron, Amaranth, SocGen, JP Morgan: what went wrong.15 min
- Volatility and correlationCalculating both from daily prices, step by step.Interactive20 min
- Value-at-Risk and risk systemsParametric VaR, portfolio VaR, its serious limits, and when to buy software.Interactive20 min
- Module quiz 6 questions · 70% to pass