Equity Derivatives Masterclass

  Intermediate CPD: 14 hours   4 half-days   Virtual


Equity Derivatives Masterclass

Equity derivatives provide flexible tools that allow investors to protect against the downside while maintaining exposure to the upside, to enhance price or yield, to make money in a stagnant market, to implement optimal buying or selling strategies over time, and many other possibilities. This two-day seminar explains exactly how.

By the end of the seminar, participants will gain a clear appreciation of the range of equity derivative products, understand how equity derivatives are priced, appreciate how to apply these products for the benefit of investors and identify risks and understand how to manage them.

Learning Outcomes

By attending this course, you will:

  • Gain a clear understanding of the fundamentals of equity derivative products
  • Develop an intuitive understanding of the pricing of equity derivatives and the impact of volatility
  • Appreciate how option traders hedge and trade options
  • Examine the concept of volatility as an asset class, and how to make practical use of the new VIX and variance derivatives
  • Explore the practical applications of equity derivatives and their use by clients
  • Recognise the needs and perspectives of investors who want to obtain performance-driven solutions
  • Develop pro-active and innovative strategies using equity derivative products that add real value
  • Obtain hands-on experience of equity derivatives and their use in practical situations

Who Should Attend

Anyone working in the equities markets, investment managers, and those working in private wealth management.


An understanding of the equities markets.

Seminar Content

Stock-Index Futures
  • Contract definitions
  • Cash-and-carry pricing
  • The concept of the forward equity price
  • Hedging equities portfolios using futures
  • Tactical asset allocation using futures
Equity Swaps
  • Terminology
  • Variations of equity swaps
  • Term sheets
  • Integrating swaps in equity portfolios
  • Structured equity swaps
  • computer Using equity swaps
Principles and Characteristics of Options
  • Review of equity options
  • Profit profiles at and prior to maturity
  • Time value – the true cost of an option
Option Pricing – An Intuitive Approach
  • An intuitive insight into option pricing
  • Types of option pricing model
  • Closed-form option pricing
  • Binomial option pricing
  • Monte Carlo option pricing
  • Time value revisited
  • Early exercise of American options
  • Put-call parity
  • Volatility – historical vs. implied vs. experienced vols
  • Volatility smiles and skews
  • Volatility and option prices
  • Option Greeks
  • The meaning of delta, theta, vega, gamma, and rho
  • computer Option pricing workshop
Combining Options
  • computer Designing your own structure – a fluent transition between payoff diagrams and component parts
Option Trading
  • Directional vs. volatility trading
  • Spread trading
  • Near vs. far dates
  • Out-of-the-money vs. in-the-money
  • Options vs. cash
  • computer Directional and volatility trading with equity options
VIX Futures, Options, and Variance Swaps
  • Volatility as an asset class
  • Historical vs. implied volatility derivatives
  • What is the VIX?
  • VIX futures – concept and definitions
  • Applications for VIX futures
  • Volatility swaps and variance swaps
  • Practical applications for variance swaps
  • computer Using VIX futures
How Traders Hedge Options
  • How delta-hedging works
  • Why be delta-neutral?
  • Buying high and selling low to achieve delta-neutrality
  • The link between delta, gamma, and theta
  • The trade-off between implied and experienced volatility
  • computer Delta-hedging simulation
  • The workings of an equity option trading desk
Hedging Strategies with Vanilla Options
  • Summary of the key customer-driven strategies
  • Price protection
  • Hedging with options – advantages and disadvantages
  • Basic option hedge structures
  • Selling options within hedging programs
  • Caps and collar
  • Put-spread collars
  • Participating forwards
  • Zero-premium structures
  • computer Hedging an equities portfolio
Yield Enhancement Strategies
  • Price and yield enhancement strategies
  • Income generation strategies
  • Butterflies, conversions, and reversals
  • computer Mini-workshop: the camel strategy
Creating Synthetic Exposure
  • Bull and bear strategies
  • Asset allocation using equity derivatives
  • Creating targeted plays
  • 90/10 strategies
  • computer Mini workshop: the 90/10 strategy
Exotic Options and their Uses
  • Review of exotic options
  • Path-dependent options...
  • ...Barriers, Asians, ladders and cliquets
  • Options with step-like (digital) payouts
  • Applications for exotics
  • Guaranteed-return equity funds
  • Contingent (pay-later) premium options
  • Mini-premium option
  • computer Building a mini-premium option
Virtual Learning

When and Where
   8 Jul 2024 - 11 Jul 2024
   a.m. sessions – 08:00 to 12:00 (for Asia / EMEA participants)
   p.m. sessions – 13:00 to 17:00 (for EMEA / Americas participants)
   All times are GMT (London time)

Other Dates and Locations
Search for Equity Derivatives Masterclass in our course schedule for alternative dates and locations where this course is offered.

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