Course description
Learning Objectives
- Provide a clear understanding of the terminology and the concepts behind derivatives.
- Cover the fundamental knowledge you need to know about derivatives.
- Understand why derivatives are used as well as or in place of cash assets.
- Be aware of how derivatives are used by investment managers and illustrate simple portfolio examples of how they are used in the portfolio.
- Recognise the difference between Exchange Trade and Over-The-Counter (OTC) products.
- Offer an insight into the different derivative instruments used such as futures, swaps and options and the potential risks involved.
Upcoming start dates
Choose between 3 start dates
Training Course Content
Derivatives Market Overview
- Definition of a derivative and the underlying markets
- Differentiating derivatives from traditional cash market products
- Derivative execution – how they are traded: exchange traded vs. OTC
- Types of derivatives – forwards and futures, swaps and options
- Size of the derivatives markets and the market participants
Derivative Products – Forwards, Futures and Swaps
- Futures and forward contracts – exchange traded vs. Over-The-Counter (OTC)
- Review of the contract definitions and mechanics
- The concept of margin
- Role of the clearing house
- Portfolio applications – hedging using equity index futures and currency forwards to mitigate market risks
- Swap contracts
- What are they? – why use swaps and how they differ from exchange traded futures
- Cash flows and mechanics
- Portfolio applications – equity swaps, interest rate swaps (IRS), currency swaps and credit default swaps (CDS)
Case study – using forward, futures and swaps in a portfolio
Derivative Products – Options
- Options fundamentals and terminology – calls vs. puts and intrinsic value vs. time value
- Different option styles – American vs. European options
- Option pay off diagrams
- Why use options over futures and forwards?
Case study – using options in a portfolio
Derivatives in the Portfolio Summary
- Overview of how derivatives are used by investment managers
- Advantage and disadvantages summarised
- A brief look at: asset allocation, index-linked funds and absolute return strategies
Course delivery details
All courses can be delivered ONSITE, ONLINE or BLENDED to suit your distinct requirements.
Whether one-to-one or group deliveries, entry level or boardroom executives, are consultants are here to develop a programme to meet your specific business needs.
Simply contact us to discuss your requirements.
Content for this course, including start date and length, can be tailored to meet client needs.
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