Course 19 of 20 · Coffee Desk Academy

Default & Margin-Liquidity Stress

Stage E, Resilience and integrated desk practice. Level 9 of 10.

Stress testing counterparty default, washout and margin call liquidity across the financed physical and futures book.

124 chapters · 11 modules · every chapter one 8 to 10 minute explainer · builds on: Course 08, Course 13, Course 14, Course 18

Enrol or enquire See the 124 chapters
How a chapter is delivered

One chapter is one idea taken to the point of use

Each chapter covers one idea to the point where you can use it, and comes two ways: a narrated explainer, and a deep dive audio discussion of around thirty minutes that works the same material at depth.

Self-paced throughout, and the same chapters can be taught as a cohort. Chapters run in order: each one assumes only what the chapters before it taught, and capability belonging to a later course is named and deferred rather than half-covered.

Curriculum

11 modules · 124 chapters

Open any module for its full chapter list, in teaching order.

M0 Financial Failure Is Its Own Subject Ch 1-11
  1. When the Money Fails and the Coffee Is Fine
  2. Supply Resilience Ends Where Solvency Begins
  3. A Crop Failure That Becomes a Credit Event
  4. Granted By, Held By: Reading a Right Before You Rely On It
  5. Posited, Dated and Sized: The Discipline of a Stress Run
  6. Whose Chair the Test Is Run From
  7. Three Objects This Material Tests
  8. The Words a Stressed Coffee Book Uses
  9. The Book, the Hedge and the Unfixed Balance Taken as Given
  10. A Stress Run Ends in a Number Somebody Signs
  11. The Route From Exposure Register to Survival Verdict
M1 The Exposure Register Behind Every Run Ch 12-22
  1. Every Line Written With Its Direction Attached
  2. Bags Bought, Bags Sold and the Length Between Them
  3. Which Bags the Lender Already Has a Claim Over
  4. The Futures Leg and the Account It Sits In
  5. Unfixed Tonnage as a Register Entry
  6. Money Already Gone to Origin
  7. Invoices Issued and the Days Before They Are Paid
  8. Currency Contracts as a Cash Obligation in Their Own Right
  9. One Name Appearing on Four Lines
  10. An Illustrative Register for a Mid-Sized Merchant
  11. Reading the Register for the Place It Breaks First
M2 The Hedge Is Intact and the Desk Is Insolvent Ch 23-34
  1. A Correct Hedge With a Wrong Cash Shape
  2. Who Calls and Who Pays, Set Down Once
  3. Measuring the Drift Between the Two Clocks
  4. Where the Physical Gain Actually Turns Into Money
  5. Building the Margin Calendar for a Rising Market
  6. The Call That Grows Faster Than the Collateral
  7. A Collapsing Market Hurts the Other Half of the Book
  8. The Roaster's Long Hedge in a Falling Market
  9. Two Exchanges, Two Clearing Relationships
  10. Margin in Dollars, Funding in Another Currency
  11. The Peak Day and the Headroom Left on It
  12. An Illustrative Rally Run Day by Day
M3 What the Clearing Relationship Can Do to You Ch 35-44
  1. The Broker's Right to Close You Out
  2. Intraday Calls and the Hours You Do Not Have
  3. The Bags You Own Cannot Be Posted to a Clearer
  4. Short Option Legs and the Call Nobody Budgeted
  5. The Give-Up That Moves a Margin Burden
  6. A Hedge Carried Through Delivery Months
  7. One Broker, One Point of Failure
  8. Over-the-Counter Cover and Its Credit Support
  9. Unwinding a Hedge to Pay for It
  10. What the Clearing House Guarantees and What It Does Not
M4 The Seller at Origin Who Cannot Perform Ch 45-56
  1. Late, Short or Gone: Grading a Seller's Failure
  2. Will Not Pay and Cannot Pay Are Different Problems
  3. The Advance That Was Never Secured
  4. A Cooperative Caught Between Its Members and Its Buyer
  5. Side-Selling When the Market Runs Away
  6. Buying the Coffee Again in a Market That Knows
  7. The Hedge Left Standing Against Nothing
  8. An Unfixed Purchase Whose Seller Disappears
  9. When the Export Licence, Not the Seller, Fails
  10. Money Trapped Inside a Producing Country
  11. Chasing a Claim Across a Border
  12. One Origin Failure Costed End to End
M5 The Buyer Who Stops Paying Ch 57-67
  1. A Roaster in Trouble and a Warehouse Full of Its Blend
  2. Signals a Customer Reads Differently From a Credit Officer
  3. Holding Back Delivery Without Breaching Yourself
  4. The Receivable That Was a Credit Decision All Along
  5. Insurance, Guarantees and the Cover You Think You Have
  6. Reselling a Lot Built for One Recipe
  7. The Fixation Right Held by a Buyer That Has Failed
  8. Pricing Into a Deadline Against a Silent Counterparty
  9. Setting Off What You Owe Against What You Are Owed
  10. Coffee Afloat When the Buyer Stops Answering
  11. One Roaster Failure Costed End to End
M6 The Washout and the Credit Decision Inside It Ch 68-79
  1. What a Washout Actually Is
  2. Who Proposes a Washout, and Why That Matters
  3. Computing the Difference, Direction First
  4. A Rising Market: The Seller Pays
  5. A Falling Market: The Buyer Pays
  6. Washing Out an Unfixed Contract
  7. Agreeing a Washout Is Granting Credit
  8. Taking the Difference Now or the Coffee Later
  9. The Hedge Behind a Washed-Out Contract
  10. Washouts Running Down a Back-to-Back Chain
  11. The Washout That Is Really an Unsecured Loan
  12. Writing the Washout Down Properly
M7 The Lender, the Base and the Second Round Ch 80-90
  1. The Facility Is a Counterparty Too
  2. The Base Revalues Monthly, the Call Arrives Daily
  3. The Loss Lands Twice: Once on Profit, Once on Availability
  4. Lifting the Hedge to Save Cash and Losing the Line
  5. A Covenant Tested in the Worst Quarter
  6. The Bank That Issued the Credit Fails
  7. Everyone Asks for Security at the Same Moment
  8. Pledged Twice and Financed Once
  9. What a Lender Will Accept in Exchange for Patience
  10. Facility Headroom Held Deliberately Idle
  11. Transfer Risk and the Origin Subsidiary
M8 Designing a Run Somebody Will Act On Ch 91-101
  1. A Scenario Somebody Will Actually Act On
  2. The Five Shocks a Coffee Book Should Be Run Against
  3. Running One Shock Across Every Leg at Once
  4. Combining Shocks, and Why the Order Changes the Answer
  5. Starting From the Payment the Desk Cannot Miss
  6. How Severe Is Severe Enough
  7. Where the Joins Are in a Coffee Stress Test
  8. The Three Numbers the Run Reports
  9. Who Owns the Test and How Often It Runs
  10. Triggers Agreed Before the Morning They Are Needed
  11. Showing the Result to a Lender Without Alarming It
M9 When the Run Says the Book Does Not Survive Ch 102-112
  1. Deciding What Gets Paid First
  2. Selling Coffee You Meant to Keep
  3. Asking a Buyer to Fix Early
  4. Proposing the Washout Yourself
  5. Cutting the Hedge Is a Decision, Not a Default Setting
  6. Cash From Somewhere Other Than the Main Lender
  7. Stopping Origin Payments and What It Destroys
  8. Shrinking the Book on Purpose
  9. Telling People While You Still Have Choices
  10. The Playbook Written in a Quiet Month
  11. A Failing Run Turned Into an Action List
M10 One Episode Worked End to End Ch 113-124
  1. The Run Begins: Book, Facilities and Assumptions
  2. Week One: A Frost Report and a Rally
  3. Week Two: The Call Arrives Before the Gain
  4. Week Three: The Cooperative Cannot Deliver
  5. Week Three Continued: The Washout Offered
  6. Week Four: Replacement Coffee at a Wider Differential
  7. Week Five: The Lender Reviews the Base
  8. The Verdict: Peak Day, Headroom and the Decision Taken
  9. The Same Five Weeks With No Run Behind Them
  10. Reading Every Line Backwards Before You Sign It
  11. What a Surviving Number Does Not Promise
  12. The Shortcuts Taken Here, and Where They Fail

The brochure gives each of these 124 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 19 of twenty

It stands alone, and it is also the entry point to the Coffee Desk Academy pathway.

Enrol or enquire See the whole pathway