Commodity Derivatives And Risk Management

By Prof. Prabina Rajib   |   IIT Kharagpur
Learners enrolled: 2037
Commodity derivatives market has witnessed tremendous growth in India. Since the setting up of different national level demutualized commodity exchanges such as NCDEX, MCX and NMCE about a decade back, the Indian commodity derivative market has achieved considerable growth in trading volume, types of commodities contracts traded, warehouse development and also has brought in significant changes to spot trading of commodities. The course covers almost the entire spectrum of commodities traded in the Indian commodity market, including agricultural commodities, crude oil, base metal, precious metal, and electricity. This course will also cover derivative contracts on weather, carbon, freight and real estate traded in international exchanges such as CME, LME, LBMA, DGCX and The Baltic Exchange etc. Fundamental concepts such as value-at- risk based margin calculation, seasonality, minimum variance hedge ratio, basis risk, commodity index creation, pricing and valuation of derivatives contracts will be discussed in earlier part of the course. Subsequently futures, options, swaps, tapos, spread contracts like crack/crush/spark on commodities mentioned earlier can be used by companies to mitigate price risk will also be discussed in detail.

INTENDED AUDIENCE: MBA/ Masters in Finance/Ph.D

PREREQUISITES: Basic Knowledge on Financial Markets and Derivatives

INDUSTRY SUPPORT:       Commodity price risk hedging team members of companies which are producer and consumers of commodities, commodity derivatives traders, MBA students specializing in finance and risk management.
Course Status : Completed
Course Type : Elective
Duration : 8 weeks
Category :
  • Management Studies
Credit Points : 2
Level : Postgraduate
Start Date : 25 Jul 2022
End Date : 16 Sep 2022
Enrollment Ends : 08 Aug 2022
Exam Date : 25 Sep 2022 IST

Note: This exam date is subjected to change based on seat availability. You can check final exam date on your hall ticket.

Page Visits

Course layout

Week 1: Introduction to Commodity Derivatives, Commodity Exchanges and Commodity Contracts.
Week 2: Pricing Commodity Forward, Futures & Options
Week 3: Agricultural Price Risk Management
Week 4: Crude oil & Base Metal Derivatives
Week 5: Gold & Electricity Price Risk Management
Week 6: Weather and Carbon Derivatives
Week 7: Derivatives on Freight, Water, Property and Payroll                   
Week 8: Lessons from  major commodity price manipulations and commodity derivative losses

Books and references

Text Books

  1. Commodity Derivatives and Risk Management by Prabina Rajib  http://phindia.com/bookdetails/commodity_derivatives_and_risk_management_by-rajib_prabina_-isbn-978-81-203-4899-8
  2. Commodity Derivatives: Markets and Applications by Neil C. Schofield

Instructor bio

Prof. Prabina Rajib

IIT Kharagpur
Prof. Prabina Rajib, PhD (Finance, IIT Kharagpur) is Professor, Vinod Gupta School of Management, Indian Institute of Technology Kharagpur, West Bengal. She has more than a decade of academic experience and has presented and published many papers in national and international journals and conferences. She was also a Fulbright scholar at Purdue University, USA. Dr. Prabina Rajib's areas of interests include Indian Capital and Derivative Markets, FDI entry strategy and Mergers and Acquisitions by Indian Companies. She has also been a guide to many PhD scholars and has authored a book on Stock Exchanges, Investments and Derivatives.

Course certificate

The course is free to enroll and learn from. But if you want a certificate, you have to register and write the proctored exam conducted by us in person at any of the designated exam centres.
The exam is optional for a fee of Rs 1000/- (Rupees one thousand only).
Date and Time of Exams: 25 September 2022 Morning session 9am to 12 noon; Afternoon Session 2pm to 5pm.
Registration url: Announcements will be made when the registration form is open for registrations.
The online registration form has to be filled and the certification exam fee needs to be paid. More details will be made available when the exam registration form is published. If there are any changes, it will be mentioned then.
Please check the form for more details on the cities where the exams will be held, the conditions you agree to when you fill the form etc.


Average assignment score = 25% of average of best 6 assignments out of the total 8 assignments given in the course.
Exam score = 75% of the proctored certification exam score out of 100

Final score = Average assignment score + Exam score

YOU WILL BE ELIGIBLE FOR A CERTIFICATE ONLY IF AVERAGE ASSIGNMENT SCORE >=10/25 AND EXAM SCORE >= 30/75. If one of the 2 criteria is not met, you will not get the certificate even if the Final score >= 40/100.

Certificate will have your name, photograph and the score in the final exam with the breakup.It will have the logos of NPTEL and IIT Kharagpur. It will be e-verifiable at nptel.ac.in/noc.

Only the e-certificate will be made available. Hard copies will not be dispatched.

Once again, thanks for your interest in our online courses and certification. Happy learning.

- NPTEL team

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