On December 5, ISET hosted Levan Akhvlediani, General Manager of Kagri Limited, who delivered a seminar on physical commodity trading, which takes place around the world. According to Mr. Akhvlediani, being a trader is a very demanding job that carries high risk, but at the same time is very interesting. For any successful trader, the key factors are knowing information about the market and understanding market opportunities. The law of trade (as for most businesses) is – “buy low, sell high”.

The seminar nicely combined Mr. Akhvlediani’s own success stories with the theories of physical commodity trading. At the beginning of the presentation, he introduced the Incoterms (EXW, FCA, FOB, CFR, and CIF) that define how the obligations of delivery are split among buyers and sellers and are always included in the terms of delivery.

He made distinctions between junior traders (who provide the deal) and senior traders (who close the deal). The presenter clarified the steps involved in making a deal in detail (including operations, logistics, and types of financing) and defined one of the most popular types of financing – a Letter of Credit, which is a form of conditional guaranteed payment.

Mr. Akhvlediani then focused the attention of the audience on the futures market, which is mostly (94%) used for speculation/arbitrage and only a small part (6%) for hedging. He finished his seminar by discussing personal relationships as a crucial element of trading.

ISET would like to thank Levan Akhvlediani for providing a very interesting and informative seminar to the ISET community.