Introduction to Commodity Derivatives

Course Overview

This Introduction to Commodity Derivatives course provides a comprehensive introduction to the world of commodity derivatives for individuals with little or no prior experience. Delivered by experienced traders and market practitioners, this classroom-based course blends engaging instruction with hands-on exercises to bring the concepts of futures, options and hedging strategies to life.

Participants will gain foundational knowledge of how commodity derivatives function, how they differ from physical trading and how they can be applied for hedging, speculation and risk management. Practical sessions are supported by pre-course e-learning and optional post-course video clinics, ensuring learners can reinforce concepts beyond the classroom.

The course is relevant across a wide range of roles in the commodity value chain—from trading and brokerage to operations, sales and risk management—offering insight into how derivative markets support global commodity flows.

Learning Objectives

By the end of this Commodity Derivatives training course, participants will be able to:

• Explain the fundamental concepts of commodity derivatives, including key definitions, types and how they differ from physical markets.
• Understand the structure and function of futures contracts, including standardisation, settlement processes, margining and clearing mechanisms.
• Compare futures with forward contracts and describe the order-trade-clearing lifecycle within regulated exchanges.
• Recognise the key terminology and components of a trading screen and interpret basic market data in real time.
• Understand the primary uses of commodity derivatives, including hedging, speculation and arbitrage.
• Explain the principles of futures pricing, including fair value, cost of carry, contango and backwardation.
• Analyse basic spread strategies, such as calendar spreads and rolling and evaluate their liquidity and strategic applications.
• Apply foundational market analysis techniques, including both fundamental and technical perspectives, to interpret futures price movements.
• Compare the features of options and futures, understanding when and why options might be used in commodity markets.
• Build confidence in participating in futures and options trading discussions, supporting decision-making in trading, operations or client-facing roles.