ACF Academy : : Derivatives Training : : Introduction to Derivatives

Category:

Derivatives Training

Targeted Audience:

Anyone working in the financial markets.

Prerequisites:

None

CPE Credits:

7 hours

Course Level:

Foundation

The principal objectives of this intensive one-day seminar are to:

	Provide a clear overview of the range of derivative products, and the uses to which they can be put
	Explore how clients use derivatives to mitigate equity, interest rate, and credit risks
	Examine how derivatives can also be used to enhance value and increment yield
	Give delegates first-hand experience of each topic through workshops and case studies

Derivatives – good or bad?


Introduction to Derivatives

	What are derivatives?
	Derivative building blocks: forwards and futures, swaps, and options
	Derivatives as a hedging tool
	Derivatives as a speculative tool
	Derivatives as a structuring tool
	Derivatives across markets – FX, equities, rates, commodities, and credit

Forward Markets

	Why is there a need for forward contracts?
	Principles of forward pricing
	The FX forward market
	Using FX forwards to avoid currency risk

Financial Futures

	Definitions and terminology
	How futures differ from OTC products
	Standardisation of contracts
	Overview of interest-rate, bond, stock-index, and currency contracts
	Physical delivery vs. cash settlement
	How margining systems work
	A brief insight into cash and carry pricing
	Using bond and stock index futures for tactical asset allocation

Interest Rate, Currency, and Equity Swaps

	The concept of a swap
	Definitions and terminology
	Interest rate swaps
	Currency swaps
	Equity swaps
	Central counterparties
	Swap execution facilities (SEFs)
	Swap applications
	Fixing investment returns


Options

	Why options are different
	Options concepts and terminology
	The importance of time value
	Components of time value
	Value and profit profiles
	An intuitive insight into option pricing
	What volatility means

Using Stock Options

	Bull and bear strategies
	Price enhancement
	Price protection
	Using options to enhance value

Credit Derivatives

	Principles and functions of credit derivatives
	Types of credit derivatives
	The credit derivatives market
	Credit default swaps
	Terms and definitions
	Credit events
	Settlement types
	Market conventions
	CDS applications…
	Taking a view of credit
	Exploiting relative value
	CDS Application Ideas

NB All practical sessions are highlighted like this:
	means a Workshop or Simulation
	means a Case study