Energy Risk: Valuing and Managing Energy Derivatives [Hardcover]

This book provides innovative, proven strategies for skillfully trading energy markets. The energy market uses tools and models that are unique and different from those required for traditional financial markets. With the increasing deregulation of the electricity market, energy is on the brink of becoming the hot opportunity for traders, power marketers, and managers worldwide. "Energy Risk: Valuing and Managing Energy Derivatives" provides not only an expert overview of energy trading but also the philosophies and strategies necessary for trading and managing risk in this exciting new arena of finance and investing. Dragana Pilipovic, a Harvard-trained physicist now consulting and designing software in the energy markets, has written the first book to discuss the intricacies and mechanics of energy markets.This groundbreaking book provides practical answers on how best to get a foothold in this emerging market. You'll also find: in-depth explanations of the primary factors that influence energy risk, such as spot price behavior, volatility, and the forward price curve; introduction and detailed discussion of the fundamental price drivers of energy markets including electricity, natural gas, and heating and crude oil; and, specific ways in which risk managers can use tools introduced throughout the book to achieve their companies' risk/return goals.The growth in volume for NYMEX and IPE energy contracts is the only proof you need of the enormous potential in trading and energy markets! Dragana Pilipovic's "Energy Risk", with unique trading models for managing risk in energy and commodity trading, contains over 175 charts and graphs that illustrate key features of the market including a wide variety of equations, correlations, and methodologies. Its primarily quantitative approach and well-supported conclusions make it the ideal single-source, desktop manual for getting reasonable answers to actual modeling and implementation problems surfacing in today's complex and exciting energy markets.

Gain the benefit of Dragana Pilipovic's complete energy risk management system, from devising hedging and trading strategies to the implementation on the trading desk. Pilipovic covers valuation and portfolio analysis, along with tips for managers who must deal with energy risk. Designed for institutions that trade and hedge energy, as well as end-users, Energy Risk will be especially useful for key markets such as electricity or natural gas.

Completely revised and updated, the Second Edition of Energy Risk presents an unsurpassed guide to energy trading, together with a full range of winning methods and strategies for valuing energy derivatives and managing risk in these ever volatile markets.

Noted researcher and energy markets innovator Dragana Pilipovic offers a cutting-edge examination of market behavior that encompasses both quantitative analysis and trader-oriented insights, providing practical guidance on energy trading and risk management issues.

The Second Edition of Energy Risk takes readers step by step through the primary factors that influence energy risk, methods of building marked-to-market forward price curves, valuing energy options, and strategies for achieving risk goals.

This updated classic features three new chapters on the emerging energy market and marked-to-market issues...more technical information on energy risk measurement and management...updated sections on market price analysis, demand drivers, decentralization of markets, and volatility...and new material on energy-specific models, seasonal effects, and the derivation of the mean-reverting price model.

With this new edition of Energy Risk

, you'll be able to:

Learn the Latest Methods of Trading, Modeling, and Hedging for Today's Energy Markets
Discover What Makes Energies So Different from Other Markets
Master Modeling Principles and Market Behavior
Harness Statistical Tools Essential to Success in the Energy Markets
Improve Their Understanding of Spot Price Behavior
Acquire the Skills to Analyze the Forward Price Curve
Build Marked-to-Market Forward Price Curves by Implementing Forward Price Models
Find Out How to Measure Volatilities
Get an Overview of Option Pricing for Energies
Explore Option Valuation Techniques
Examine Specific Ways of Valuing Energy Options
Review the Factors Involved in Measuring Energy Risk
Optimize Their Portfolio Analysis Expertise
Survey Critical Risk Management Policies
This all-in-one energy trading resource also contains helpful mathematical and statistical notes...models from interest rate and bond markets...a glossary of energy risk management terms...and a select bibliography.

Dragana Pilipovic works at AAA Capital Management, a hedge fund in Houston. She was also the founder and president of SAVA Risk Management Corporation, which provided quantitative analysis, risk management, and software development to major companies in the energy industry and energy trading field. Ms. Pilipovic has received a United States patent for a volatility model, has published numerous articles in industry journals and speaks at professional conferences nationwide. --This text refers to an out of print or unavailable edition of this title.

Innovative, proven strategies for skillfully trading energy markets. The energy market uses tools and models that are unique and different from those required for traditional financial markets. With the increasing deregulation of the electricity market, energy is on the brink of becoming THE hot opportunity for traders, power marketers, and managers worldwide. Energy Risk: Valuing and Managing Energy Derivatives provides not only an expert overview of energy trading but also the philosophies and strategies necessary for trading and managing risk in this exciting new arena of finance and investing. Dragana Pilipovic, a Harvard-trained physicist now consulting and designing software in the energy markets, has written the first book to discuss the intricacies and mechanics of energy markets. This groundbreaking book provides practical answers on how best to get a foothold in this emerging market. You'll also find: in-depth explanations of the primary factors that influence energy risk, such as spot price behavior, volatility, and the forward price curve; introduction and detailed discussion of the fundamental price drivers of energy markets including electricity, natural gas, and heating and crude oil; specific ways in which risk managers can use tools introduced throughout the book to achieve their companies' risk/return goals. The growth in volume for NYMEX and IPE energy contracts is the only proof you need of the enormous potential in trading and energy markets! Dragana Pilipovic's Energy Risk, with unique trading models for managing risk in energy and commodity trading, contains over 175 charts and graphs that illustrate key features of the market including a wide variety of equations, correlations, and methodologies. Its primarily quantitative approach and well-supported conclusions make it the ideal single-source, desktop manual for getting reasonable answers to actual modeling and implementation problems surfacing in today's complex and exciting energy markets.

As the electricity, natural gas, and other energy markets continue to grow in trading volume and importance, investment professionals must know NOW how to properly assess and evaluate problems and opportunities unique to this complex yet vibrant market. Energy Risk: Valuing and Managing Energy Derivatives is the market tested and immediately valuable answer to the many trading and risk management questions that traders, utilities, power marketers, natural gas firms, large end users, and the professionals who help them face in the often-untested waters of energy investment, trading, and risk management . Noted researcher and energy markets innovator Dragana Pilipovic uses her unmatched experience and education, and uniquely valuable insights, to provide an analysis of market behavior that encompasses both fundamental and quantitative analysis. She shows how to establish a modeling process that involves the key players Ñ managers, traders, quantitative analysts, and engineers Ñ and provides practical answers to energy trading and risk management issues. While its comprehensive overview of energy investing and risk management alone make Energy Risk required reading for todayÕs cutting-edge professional, it is the bookÕs detailed analyses and equations, and its presentation of progressively technical information, that make it one of the most complete and valuable manuals available for any market. Energy Risk sets the standard for new market introductory manuals, and will be the standard energy market reference for many years to come.