Course 19 of 20 · Crude Oil Desk Academy

Portfolio Management, Disruption and Counterparty Failure

Stage F, Structuring and integration. Level 9 of 10.

Running a constrained book, liquidity stress, supply disruption, default and replacement cost.

120 chapters · 11 modules · every chapter one 8 to 10 minute explainer · builds on: Course 12, Course 13, Course 17

Enrol or enquire See the 120 chapters
How a chapter is sized

One chapter is one idea taken to the point of use

Each chapter is a single self-contained explainer of 8 to 10 narrated minutes, covering one idea to the point where you can use it.

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 · 120 chapters

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

M0 The Book as One Object Ch 1-10
  1. From a Pile of Trades to a Book
  2. What the Portfolio Manager Is Accountable For
  3. The Three Constraints: Risk, Cash and Capacity
  4. Who Sits Around the Book
  5. The Position Is a Statement, Not a Fact
  6. Length, Shortness and What They Cost You
  7. Mark to Market, Mark to Model and Mark to Nothing
  8. Realised, Unrealised and the Cash That Has Not Arrived
  9. What Can Go Wrong: A Taxonomy of Book Failures
  10. Map of the Course and What It Deliberately Leaves Out
M1 Aggregation and the Single Exposure View Ch 11-21
  1. Normalising Units Before You Add Anything
  2. Grade Equivalencing to a Common Reference
  3. Time Bucketing a Physical Book
  4. Priced, Unpriced and Partially Priced Volume
  5. Bringing Physical and Paper Into One View
  6. Netting Rules and When Two Positions Do Not Offset
  7. Optionality Inside the Book You Did Not Buy
  8. Currency and Freight Exposure Hiding in a Crude Book
  9. Building the Daily Exposure Report, Part One: Inputs
  10. Building the Daily Exposure Report, Part Two: The Pack
  11. Sensitivities: What One Dollar Actually Does to You
M2 The Limit Framework Ch 22-32
  1. What a Limit Is Actually For
  2. Volumetric Limits and Why They Survive
  3. Tenor Limits and the Far End of the Curve
  4. Basis and Spread Limits
  5. Loss Limits: Stop-Loss, Drawdown and the Annual Budget
  6. Credit Limits as a Trading Constraint
  7. Setting a Limit: From Appetite to a Number
  8. Allocating One Firm Limit Across Several Desks
  9. Limit Utilisation and the Sixty Percent Habit
  10. When a Limit Is Breached
  11. Temporary Increases and the Politics of Approval
M3 Position Reporting and Why the Books Disagree Ch 33-42
  1. The Trader's Book and the System's Book
  2. Reconciling the Two, Step by Step
  3. Estimated Volume, Nominated Volume, Actual Volume
  4. Trade Date, Pricing Date, Delivery Date, Payment Date
  5. Curve Integrity and the Cost of a Bad Mark
  6. Profit Attribution: Where the Money Came From
  7. The Unexplained Residual
  8. The Daily Sign-Off and What Signing Means
  9. Month-End Close on a Physical Book
  10. Reporting Upward Without Losing the Truth
M4 Value at Risk on a Physical Book Ch 43-53
  1. Value at Risk in One Sentence
  2. Choosing the Horizon and the Confidence Level
  3. Historical Simulation, Worked by Hand
  4. The Variance Approach and Its Comfortable Lie
  5. Correlation Is Not a Constant
  6. What Value at Risk Does to a Physical Position
  7. Liquidity-Adjusted Risk and the Time to Exit
  8. Incremental and Component Risk
  9. Backtesting: Does the Number Hold Up
  10. Expected Shortfall and the Shape of the Tail
  11. Using the Number Without Believing It
M5 Stress and Scenario Design Ch 54-64
  1. Stress Testing Is a Different Question
  2. Designing a Scenario That Someone Will Act On
  3. Historical Replay as a Scenario
  4. Building a Hypothetical That Has Never Happened
  5. Reverse Stress Testing: What Would Break Us
  6. Joint Scenarios: Price, Logistics and Cash Together
  7. Scenario Severity: How Far Is Far Enough
  8. Translating a Scenario Into an Action List
  9. Why Most Stress Programmes Become Ritual
  10. Maintaining a Scenario Library
  11. A Worked Stress Test on a Three-Cargo Book
M6 Concentration Ch 65-74
  1. Concentration Is the Risk That Measures Smallest
  2. Measuring Concentration Honestly
  3. Grade Concentration and the Narrow Buyer Set
  4. Regional Concentration and the Single Chokepoint
  5. Counterparty Concentration Across Products and Time
  6. Hidden Correlation Between Counterparties
  7. Funding Concentration: One Lender, One Book
  8. Time Concentration: Too Much in One Window
  9. Setting and Policing Concentration Limits
  10. The Cost of Deliberate Diversification
M7 The Constrained Book: Cash and Capacity Ch 75-86
  1. The Cash Ceiling as a Trading Limit
  2. Forecasting the Book's Cash, Thirteen Weeks Out
  3. Ranking Trades by Cash Consumed per Dollar of Margin
  4. When the Facility Is Reduced, Part One: The First Day
  5. When the Facility Is Reduced, Part Two: Choosing What to Shed
  6. Negotiating Room: What to Offer a Lender
  7. A Liquidity Squeeze, Day One: The Margin Call Arrives
  8. A Liquidity Squeeze, Day Two: Finding the Cash
  9. A Liquidity Squeeze, Day Three: Cutting the Hedge Is a Choice
  10. A Liquidity Squeeze, Day Four: Telling People
  11. A Liquidity Squeeze, Day Five: Counting the Damage
  12. The Standing Liquidity Playbook
M8 Supply Disruption and the Replacement Decision Ch 87-97
  1. Disruption as an Obligation Problem
  2. Mapping Your Own Exposure to a Single Interruption
  3. Early Signals That a Cargo Will Not Arrive
  4. The Replacement Decision, Part One: Must You Replace
  5. The Replacement Decision, Part Two: Pricing the Alternatives
  6. Buying Into a Market That Knows You Need It
  7. Partial Performance and the Honest Short Delivery
  8. Substituting a Different Grade
  9. Declaring Force Majeure Yourself
  10. Force Majeure Declared Against You, Part One: Testing It
  11. Force Majeure Declared Against You, Part Two: The Book Response
M9 Counterparty Failure and Replacement Cost Ch 98-109
  1. The Difference Between Not Paying and Not Able to Pay
  2. Behavioural Warning Signs on a Live Trade
  3. Suspending Performance Without Breaching
  4. The Close-Out Decision and Its Timing
  5. Replacement Cost, Part One: What the Concept Means
  6. Replacement Cost, Part Two: Working the Number
  7. Replacement Cost, Part Three: Proving It
  8. Set-Off and Netting Across a Relationship
  9. When the Cargo Is Already on the Water
  10. Chasing Recovery and Pricing the Wait
  11. Repairing the Book After a Default
  12. What a Default Should Change Permanently
M10 Judgement, Governance and the Limits of Measurement Ch 110-120
  1. Deciding With Half the Facts
  2. The Decision Record and Why It Protects You
  3. Who Decides What, Under Pressure
  4. The Risk Committee That Is Worth Attending
  5. Escalation: Saying the Uncomfortable Thing Early
  6. What Portfolio Measurement Cannot Tell You
  7. The Measure That Changes the Behaviour
  8. A Good Decision and a Good Outcome Are Different Things
  9. Reviewing a Loss Without Hunting a Culprit
  10. A Constrained Book Under Pressure: A Worked Situation
  11. What You Can Now Run, and What Comes Next

The brochure gives each of these 120 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 Crude Oil Desk Academy pathway.

Enrol or enquire See the whole pathway