1. Name of the Course課程名稱
Chinese Name:航運金融與風險管理
English Name:Financial Shipping Derivatives
2. Overview of the Course課程概況
Category課程類別：Major Optional Courses Class hours學時數：32 Credit學分數⚄：2
Profession適用專業：Transportation Planning and Management Semester開課學期：The 2nd Semester
College開課單位：College of Transport and Communications
3. The Writer大綱編寫人：Visiting Professor
4. The Objective and Requirement of the Course教學目的及要求
Course Aims to:
The course aims to endow students with consolidated knowledge and practical expertise in the subject of ‘Financial Shipping Derivatives’. More specifically, the course provides a concise and thorough introduction into core theoretical and empirical aspects of shipping markets, important categories of risk exposures and tools to support efficient risk management in shipping. As an introductory background, the operation of derivatives markets is first discussed, the key instruments (predominantly, futures and options) are explained and core derivatives positions are developed. Financial shipping derivatives are then implemented as convenient risk management tools to hedging against important shipping risks, with a core focus on FFA (Forward Freight Agreements) contracts.
Learning Outcomes:
By the end of the module, students should be able to:
· understand a variety of key risk exposures of shipping firms with an emphasis on financial risks
· comprehend the critical role, properties and operations of financial derivatives markets to risk management
· familiarize with the implementation of key derivatives instruments (futures and options) and the function of basic forward contracts (FFAs), tailor-made to protect against core shipping risks
· utilize modern risk management techniques, predominantly ‘hedging’, to control for complex financial risk exposures of shipping firms
· gain expertise to advice shipping companies and to support investors on financial shipping risk management decisions.
5. Main Content of the Course and Pre-course課程主要內容及先修課程
Lecture Day 1:Fundamentals of Risk Management
- Types of risks for shipping firms
- The risk management process
- Applications and uses
Lecture Day 2:Basic Functions of Shipping Markets
- The world shipping industry
- Structure & properties of shipping markets
Lecture Day 3:Basic Functions of Shipping Markets
- Shipping freight contracts
Lecture Day 4: Introduction to Derivatives Markets
- Spot vs. forward transactions
- Futures & Options contracts
- Basic derivatives positions
Lecture Day 5:Forward Freight Agreements (FFAs)
- Development of FFA contracts
Lecture Day 6:Forward Freight Agreements (FFAs)
- Key FFA concepts and properties
- Credit risk and FFA clearing
Lecture Day 7: Hedging Strategies in Shipping
- Hedging as a risk management strategy
- Hedging using FFAs contracts
- Hedging examples on shipping risks
Lecture Day 8:Empirical Case Studies on Shipping Derivatives & Risk Management
Lecture Day 9: Written Exam Test
6. Teaching Methods課程教學方法
· Classroom activities: Class teaching 40%; class discussions and case studies: 30%
· Out of class activities: assigned & supplementary readings: 20%; discussion: 10%
7. Methods of Examination課程考核方式
Assessment Methods | Weighting % | Notes | |
1 | Written Test Exam Format: Multiple-Choice Questions Duration: 2 hours | 50% | Material of exam paper based on: - lectures delivered - reading list - support material |
2 | Short Assignment Submission Date: XXXXXX Topic: Hedging Freight Risk Case | 50% | Development, analysis and discussion of ‘Hedging Freight Rate Risk’, on the basis of lectures’ material, |
8. Textbook課程使用教材
1)Alizadeh, A. & Nomikos, N. (2009), Shipping Derivatives & Risk Management, Palgrave, Macmillan Publications, London. (Chapters: 1, 2, 3, 4, 5)
2)Kavussanos, M. & Visvikis, I. (2006), Derivatives and Risk Management in Shipping, Witherbys Publishing, London.
9. Main References課程主要參考資料
1)Stopford, M. (2008), Maritime Economics (3rd ed.), Rutledge, New York.
2)Grammenos, C. (2010, 2nd ed.), The Maritime Economics and Business Handbook, LLP Publications, London.
3)Geman, H. (2008), Risk Management from Shipping to Agriculturals and Energy, Wiley Finance, Chichester.
4)Hull, J. (2014, 9th ed.), Options, Futures and Other Derivatives, Prentice Hall, New York.
5)Jorion P. (2013, th ed.), Financial Risk Manager Handbook, Wiley Finance, New York.
6)Alizadeh, A. (2013), Trading volume and volatility in shipping forward freight market, Transportation Research Part E, 49, 250-265.
7)Alnes, P.A., Marheim, M.A. (2013), Can shipping freight rate risk be reduced using Forward Freight Agreements?, MA Thesis, UMB School of Business and Economics, Norway.
8)Kavussanos, M., Visvikis, I. (2006), Shipping freight derivatives: A survey of recent evidence, Maritime Policy & Management, 33(3), 233-255.
9)Kavussanos, M.G., Visvikis, I.D., Dimitrakopoulos, D.N. (2014), Economic spillovers between related derivatives markets: The case of commodity and freight markets. Transportation Research Part E: Logistics and Transportation Review, 68, 79–102.
10)Li, K.X, Qi, G., Shi, W., Yang, Z., Bang, H.S., Woo, S.H., Yip, T.L. (2014), Spillover effects and dynamic correlations between spot and forward tanker freight markets (2014), Maritime Policy & Management, 41(7), 683-696.