Energy Trading Test 1

What are the three key trading considerations discussed in class?

Fundamentals, technicals, and chaos.

What do fundamentals tell a trader?

WHAT is likely to happen to the market.

What four categories make up fundamentals in the E&P slides?

Supply, demand, logistics, and economics.

What do technicals tell a trader?

WHEN something may happen in the market.

What is “chaos” in energy trading?

Unexpected events such as storms, wars, and news that make fundamentals and technicals harder to predict.

What are examples of fundamental indicators?

Inventory reports, OPEC decisions, global demand forecasts, geopolitical events, rig counts, GDP, and industrial production.

What are examples of technical indicators?

Moving averages, RSI, MACD, Bollinger Bands, price patterns, and trends.

What is the purpose of technical analysis?

To help determine entry and exit points using prices, charts, trends, and statistical patterns.

What is a commodity in the general sense?

A good that is mined or agriculturally produced, including fuels, metals, and agricultural products.

What characteristics make a product suitable as a traded commodity?

It can generally be standardized, physically delivered, and stored for a reasonable period.

Where are futures and vanilla options typically traded?

On exchanges.

Where can swaps and options be traded?

Over the counter, or OTC.

Name major commodity exchanges discussed in class.

CBOT, CME, NYMEX, LME, ICE, and Shanghai markets.