Unit of competency Outline

Date retreived
23/07/2026 11:16 PM AWST

Whilst all efforts are made to provide accurate and timely information from the relevant source/documentation, please be aware that the information supplied may not be the most current version. The accuracy of the detail has not been confirmed by the Department and therefore should not be relied upon without first confirming the contents.

Manage price risk through trading strategy

Manage price risk through trading strategy

Unit of competency
National Code
AHCAGB606A
State Code
D6647
TGA Status
Replaced
DTWD Status
Replaced
Current Release Number
1.00
Current Release Date
10/06/2011
View on TGA
State Implementation and Classification
Approved Date
13/12/2011
Field of Education
080301 - Business Management
Original Release Date
13/12/2011
Nominal Hours
45
Description
This unit covers the process of managing price risk through trading strategy and defines the standard required to: determine cost of production; assess risk to financial returns through market or currency movements; analyse trends and evaluate forecasts; monitor and assess price movements; implement a trading strategy for price risk management.
Notes
Elements and Performance Criteria
1. Conduct market research
  • 1.1. Estimates of supply and demand are collated and evaluated.
  • 1.2. Past trends are analysed and possible future scenarios assessed.
  • 1.3. Own products are related to market indicators.
2. Determine price required
  • 2.1. Cost of production is calculated and break-even price is determined.
  • 2.2. Margins for profit and risk are determined.
  • 2.3. Forward price objectives are set to meet cost of production plus profit required.
  • 2.4. Personal attitude to risk is evaluated.
3. Develop sales plan
  • 3.1. Cash markets are evaluated and projected price trends assessed.
  • 3.2. Forward contract information is obtained and assessed.
  • 3.3. Futures prices are obtained and assessed.
  • 3.4. Options are evaluated against price objectives and the assessment of price movement risk.
  • 3.5. Taxation and cash flow implications are assessed.
  • 3.6. Appropriate mix of sale options is developed in a trading strategy.
  • 3.7. Contingency plans are developed to address possible shifts in price trend.
4. Implement trading strategy
  • 4.1. Appropriate expertise is sought as required.
  • 4.2. Market information is monitored and trading strategy adjusted according to contingency plans.
RANGE STATEMENT
The range statement relates to the unit of competency as a whole.
Cash markets may relate to:
markets that do not involve any hedging or forward selling.
EVIDENCE GUIDE
The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.
Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit
The evidence required to demonstrate competency in this unit must be relevant to workplace operations and satisfy holistically all of the requirements of the performance criteria and required skills and knowledge and include achievement of the following:
determine cost of production
assess risk to financial returns through market or currency movements
analyse trends and evaluate forecasts
monitor and assess price movements
implement a trading strategy for price risk management.
Context of and specific resources for assessment
Competency requires the application of work practices under work conditions. Selection and use of resources for some worksites may differ due to the regional or enterprise circumstances.
Replaces
State Code National Code Title Type
S3556 RTE6905A Manage price risk through trading strategy Unit of competency
Replaced By
State Code National Code Title Type
BAL37 AHCAGB606 Manage price risk through trading strategy Unit of competency