Day 2
Thursday, December 4, 2008

8:30 – 9:00 a.m.
Breakfast
9:00 – 9:30 a.m.
Industry Overview - How We Got Here

To even the most veteran of marketers, the changes in the marketplace over the last several years have been dramatic. No discussion of hedging strategies could really be complete without some background on how the industry got to where we are today. We’ll give in-depth details on:

  • History of wholesale pricing.
  • Changes in wholesale pricing/supplier strategy.
  • How basis has gained in importance.
  • Volatility — here to stay?
  • Fundamental changes in spot pricing and its relationship to wholesale markets.
  • The next step — how basis became a factor in all markets including the West Coast and East of the Rockies.
9:30 – 10:15 a.m.
How to Use Published Benchmarks in Your Fuel Buying Purchases

Most suppliers use published benchmarks as a basis for buying or selling fuel. There are subtle differences, however, in the various rack and spot benchmarks, and understanding those differences can have a tremendous impact on your bottom line. You’ll hear:

  • The major differences between publications, and between rack and spot benchmarks.
  • A detailed explanation of the new calendar average rack benchmark.
  • The many different combinations of spot benchmarks that are available and how to determine which one is right for you.
  • Branded vs. unbranded: surprising factors you may not know.
10:15 – 10:30 a.m.
Refreshment Break
10:30 – 11:15 a.m.
Specific Hedging Tools Part 3: Practical Basis Applications

Building on your hedging knowledge from yesterday, we’ll take a look at electronic exchanges and how to use basis to time your purchases. We’ll cover:

  • Exchange of futures for physical (EFP) and exchange of futures for swaps (EFS).
  • New futures contracts on electronic exchanges.
11:15 a.m. – 12:00 p.m.
Advanced Hedging Part 1: The Importance of Spread Trading

Prior sessions focused on the basics of hedging, but there are many other strategies that are available. Now learn the next step: Key terms and what they mean, including backwardation and carry. Trading spreads: discover the difference between calendar spreads and the gasoline crack spread, and why these are critical for fuel distributors to understand.

BONUS: proven tips on hedging retail margins.

12:00 – 1:00 p.m.
Networking Luncheon
1:00 – 1:45 p.m.
Advanced Hedging Part 1: The Importance of Spread Trading (continued)
1:45 – 2:15 p.m.
Key Concept Review - Quiz

Test your advanced hedging knowledge so far and review results to make sure you have the key terms and definitions down.

2:15 – 3:30 p.m.
Advanced Hedging Part 2: Basic Understanding of Options

Options are a useful tool in controlling price risk. In our final session on specific hedging tools, we’ll focus on the concept of buying options for price protection. We’ll lay it all on the table so you can determine if they’re right for your business:

  • Puts and calls: what they are and how they differ.
  • How to value an option.
  • Hedge applications.
  • Trading strategies.
3:30 – 4:00 p.m.
Key Concept Review - Quiz

We’ll test your advanced hedging knowledge so far and review your results to make sure the key concepts of hedging options are clearly understood.

4:00 p.m.
Cocktails with the Instructors