Fundamentalsof

Derivatives

30Nov2Dec2015
HongKong,HongKong
US$4,990

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ThisisModuleOneofDerivativesSchool.'FundamentalsofDerivatives'isacomprehensiveoverviewofthe
majorclassesofderivatives,distinguishingbetweenlinearandnonlinearderivatives.SaveUS$1,690for
registeringthiscouseandBankApplicationsofDerivatives!Justcontactusat
admin@euromoneylearningsolutions.comtoregisterandenjoythisspecialoffer.*FTSEligibleFinancial
TrainingSchemeformoreinformationclickonthe"CourseDescription"beloworemailus
CourseInstructor
FormerStrategicDevelopmentManagerattheLondonInternationalFinancialFuturesExchange(LIFFE)

CourseDescription

FTSEligibleFinancialTrainingSchemeforSingaporeancitizensandPRs
only(moreinformation)
Courseoverview
Module1:FundamentalsofDerivatives(Day1Day3)isacomprehensiveoverviewofthemajorclassesof
derivatives,distinguishingbetweenlinearandnonlinearderivatives.
Summaryofcoursecontent
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Howandwhyarederivativesusedinpractice?
ThedifferencebetweenexchangetradedandOTCderivatives?
Clearingproceduresforexchangetradedderivatives
Understandingtheprincipalmoneymarketderivativesandhowtheyareusedtomanageinterestraterisk
Swapsandhowbanksandotherinstitutionsusethem
PrimaonoptionsandtheirapplicationinthemanagementofFXrisk
Howderivativesareembeddedincommonstructurestoprovideinvestorswithattractiverisk/reward
profiles

Methodology
Thismodularcourseusesinteractivelectures,workedexamplesandrealworldcasestudiesshowingindetail
howtheproductsareusedandwhy.Itshowstheproductsinahighlypracticalway,withoutover
complication,withclearillustrationsofeachsothatyoumayreadilyunderstandthemandtherolethebank
plays.
YoucanattendbothmodulesofthisDerivativesSchooltoenjoymostbenefitorpickfromthefollowing
modules.
Module1:FundamentalsofDerivatives
Module2:BankApplicationsofDerivatives

SaveUS$1,690forregisteringbothmodules!
FTSEligible
ThisprogrammeisapprovedforlistingontheFinancialTrainingScheme(FTS)ProgrammeDirectoryandis
eligibleforFTSclaimssubjecttoalleligibilitycriteriabeingmet.
Pleasenotethatinnowaydoesthisrepresentanendorsementofthequalityofthetrainingproviderand
programme.Participantsareadvisedtoassessthesuitabilityoftheprogrammeanditsrelevanceto
participants'businessactivitiesorjobroles.
TheFTSisavailabletoeligibleentities,ata50%fundinglevelofprogrammefees,subjecttoacapof
$2,000/participant/programmeandalleligibilitycriteriabeingmet.FTSclaimsmayonlybemadefor
programmeslistedontheFTSProgrammeDirectorywithspecifiedvalidityperiod.Pleasereferto
www.ibf.org.sgformoreinformation.

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PleasenotethatthiscourseisonlyeligibleforFTSFundingwhenregisteringforallmodules.
,

Agenda
*FTSEligibleFinancialTrainingSchemeforSingaporeancitizensandPRsonly(moreinformation)

Module1
FUNDAMENTALSOFDERIVATIVES
Day1:Introductiontoderivativesandderivativetypes
Introductiontoderivatives
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Whatisaderivative?
TheequityCFDmarketexplained
Whyisthereamarketforderivatives?
l Attributesofderivatives
l Practicalusesofderivatives
l Leveragedtrading
l Riskmanagementapplications
l Creatingsyntheticpositions
l Advantagesofderivativeinstrumentsovercashinstruments

Thetrading,dealingandclearingenvironment
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OTCvs.Exchangetradedproducts
l Recentdevelopments
Brokingvs.Marketmaking
Tradeexecution
l Ordervs.Quotedrivenmarkets
l Marketordertypes
l Placingordersinanelectronictradingplatform
CalculatingtheP&Lonafuturescontract
UnderstandingtheClearingHouseguaranteeandmarginingsystemforexchangetradedinstruments

Casestudy:Delegateswillcompleteamarginingreturnoveraperiodoftimeforasmallportfolio
Linearderivatives:Moneymarketderivatives
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Conceptofaforwardcontract
Forwardinterestrates
Forwardrateagreements(FRAs)
l Lockinginaforwardinterestrate
Exchangetradedversion:Shortterminterestrate(STIR)futurescontracts

Casestudy:DelegateswillcompleteanumberofexercisesbasedonFRAsandSTIRs
Day2:Swaps
Multiperiodlinearinterestratederivatives:Swaps
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Theinterestrateswap(IRS)market
Typesofswap
l Interestrateswaps
l Currencyswaps
Understandingthecreditriskinswaps
Relationshipbetweenswapsandforwards
Marketstructure
l Interbankvs.Customermarket
l Brokerquotesintheinterbankmarket
Whythemarketexists:Reducingfundingcostsbyusingswaps
Applicationsofswaps

CaseStudy:Delegateswillderivethemarketswapbidandofferratesconsistentwiththeactualandtarget
borrowratesoftwoinstitutions
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AframeworkformarkingtomarketOTCderivativepositions
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Buildingthediscountfunction
Whatinstrumentstouse
"Bootstrapping"theswapscurve

Casestudy:Usingthebootstrappingapproach,delegateswillderivetheinterbankdiscountfunction
Markingtomarketinterestrateandcurrencyswaps
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Identifyingthecashflows
Representingthefloatingcashflowsasnotionalcashflows
Extendingtheprinciple:Pricingadeferredstartswap
l Markingtomarketacurrencyrateswap

Casestudy:Usingthediscountfunctionderivedearlier,delegateswillmarktomarketanumberofswap
positions
Day3:Introductiontooptions
Anoptionsprimer
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Whatisanoption?
Optionterminology
l Exercisetypes
l Option"moneyness"
l Intrinsicvs.Timevalue
Understandingthepayoffprofiles

Tradingandhedgingstrategieswithequityoptions
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Understandinghowtoconstructpayoffprofilesforcombinationsofoptionsandtheunderlying
Understandingtherelationshipbetweenputsandcall
Identifyingcommondirectionalandvolatilitytradingstrategies
Hedgingwithoptions

Casestudy:Delegateswilldrawthepayoffprofilesofanumberoftradingstrategies
Introductiontooptionpricingandriskmeasures
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Theimportanceofcorrectvaluation
Whatdrivesthepriceoftheoption:Understandingthemodelinputs
Approachestooptionvaluation:Hedgeapproachvs.Probabilisticapproach
BreakingdowntheBlackScholesoptionpricingmodel
Optionriskmeasures:The"Greeks"

Casestudy:DelegateswillusetheoptionGreekstoestimatethenewpricefollowingachangeinmarket
variables

Abouttheinstructors

TheCourseDirectorwastheStrategicDevelopmentManagerattheLondonInternationalFinancialFutures
Exchange(LIFFE),wherehewasresponsiblefortheresearchanddefinitionofnewspecialistswapandrisk
transfercontracts.Priortothis,hewasHeadofInterestRateProductDevelopmentwithresponsibilityforthe
maintenanceoftheexistingproductrangeandthedevelopmentofnewproducts.

HebeganhiscareerwithErnst&YoungandGrantThorntonasataxspecialist,beforemovinginto
corporatetreasurymanagementatRoyalMailwherehewasprojectleaderforatreasuryandrisk
managementgroup.Inthisrolehedevelopedriskmanagementprotocolsandproceduresfortheuseof
derivativeproducts.Hewasresponsibleforrecommendingtheoptimalcombinationofproducttypesand
featuresforawiderangeofsituations.

Followingthecompletionofaquantitativefinancemastersdegree,hebecameseniorlecturerinCorporate
FinanceandTaxationattheUniversityofGreenwich.HeisavisitinglecturertoCassBusinessSchoolontheir
ExecutiveMBAprogramme.

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HeisapanelmemberfortheSecuritiesInstitute,amemberoftheAssociationofCorporateTreasurersand
anassociateoftheInstituteofTaxation.
Coursesrunbythisinstructor
DerivativesSchool(ModularCourse)
FixedIncome&CorporateBonds
BankApplicationsofDerivatives

Venue
45StarHotelinHongKong,HongKong,HongKong
Allofourcoursesareheldin45starhotels,chosenfortheirlocation,facilitiesandlevelofservice.You
canbeassuredofacomfortable,convenientlearningenvironmentthroughoutthedurationofthecourse.

Duetothevariationindelegatenumbers,wewillsendconfirmationofthevenuetoyouapproximately2
weeksbeforethestartofthecourse.Coursefeesincludetrainingfacilities,documentation,lunchesand
refreshmentsforthedurationoftheprogramme.Delegatesareresponsibleforarrangingtheirown
accommodation,however,alistofconvenienthotels(manyatspeciallynegotiatedrates)isavailableupon
registration.

WhoShouldAttend
TheDerivativeSchoolisbeneficialtoprofessionalsatalllevelswhorequireathoroughunderstandingofderivativesandtheirpractical
applications.

PreviousAttendees

WhyUs
Whyus

Wehaveacombinedexperienceofover60yearsprovidinglearningsolutionstotheworldsmajor
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Qualityourclientsconsistentlyrateourperformanceexcellentoroutstanding.Ouraverageoverallscore
awardedtousbyourclientsisnineoutoften.
Trackrecordwehavedeliveredtrainingsolutionsfor95%ofworldstop100banksandhavetrainedover
250,000professionals.
Knowledgeour150strongteamofindustryspecialisttrainersareworldleadingfinancialleadersand
commentators,ensuringourknowledgebaseissecondtonone.
Reliabilityifwepromiseit,wedeliverit.Wehavedeliveredover20,000eventsbothinpersonandonline,
usingsimultaneoustranslationtodelegatesfromover180countries.
RecognitionweareaccreditedbytheBritishAccreditationCouncilandtheCPDCertificationService.Inan
independentreviewbyFeefowescored96%onserviceand95%onproduct

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