TRADING – MIDDLE OFFICE
The primary activity of a natural gas trading company is buying
and selling of natural gas. The Middle Office is tasked with monitoring
the risk associated with these trading activities.
In this course, we will talk about the activities, that are considered as Middle Office activities in an organization trading natural gas.
The activities covered under this course:
- Physical Exposure
- Price Exposure
- Option Valuation
- Value-at-Risk (VaR)
- Credit Risk
Calculating Profit and Loss (P&L or PnL): The Mark-to-Market PnL, is the one that we are going to be discussion.
Process to mitigate risk: The middle office is also responsible, to ensure that everybody operates within the risk parameters stipulated by the management.