Derivatives markets have witnessed significant change in the years following the financial crisis, not only in how they are regulated, but in the market structure for the trading and clearing of derivative instruments, and in how they are priced.
This programme will provide delegates with a detailed understanding of how these changes have impacted the derivatives landscape, and will be of particular interest to those in client-facing positions and those who are operating in back and middle office functions, who require a comprehensive overview of the changes and how they affect operations.
This four-day derivatives training programme has been designed to provide delegates with a thorough understanding of the derivatives market place for both OTC and ET and, in particular, how banks use derivatives on a day-to-day basis to manage both their own exposures and to provide solutions to their customers.
- Day 1 of the programme provides delegates with a comprehensive general knowledge and understanding of the major classes of derivatives, distinguishing between linear and non-linear derivatives.
- Day 2 concentrates on market structure, highlighting how the regulatory framework has evolved since the financial crisis and the specific implications for the trading and clearing of derivatives, notably those executed in the OTC market; trading mechanics and the critical differences between OTC and exchange-traded derivatives, as well as covering recent developments which has seen OTC instruments booked “on-exchange” and centrally cleared.
- Day 3 covers the important area of valuation for those derivatives where there is no direct market price discovery. The emphasis will be placed on cash flow analysis and how valuation approaches have changed since the financial crisis.
- Day 4 explains, by way of specific examples, how banks use derivatives for their own and customer benefit. The first part looks at specific solutions for customers and focuses on the role of swaps in the primary issuance business, and managing customer FX exposures; whilst the second looks at financial engineering, and more specifically, at how derivatives can be used to reduce funding costs and/or as a means of the bank earning fees without taking a proprietary position, whilst at the same time providing investors with instruments that meet their risk/reward requirements.
Key Learning Points
Course Training Method
- What is a derivative?
- How and why are they used in practice?
- How do exchange traded derivatives and OTC derivatives differ?
- Clearing procedures for exchange-traded and OTC derivatives
- Understanding the principal money market derivatives and how they are used to manage interest rate risk
- Swaps and how banks and other institutions use them
- Prima on options and their application in the management of FX risk
The programme will use traditional and well-tried techniques, lectures, worked examples and many realistic case studies showing in detail how the products are used and why. The course has been designed to show the products in a highly practical way, without over-complication, with clear illustrations of each so that participants may readily understand them and the role the bank plays.
Who Should Attend
The course should be of interest to those who are just starting their careers in investment banking, or those with some experience who are involved in support functions within the bank, notably, those in product control, compliance, legal, IT, and other back and middle office functions. In addition, it will be help relationship managers, sales and other individuals in client-facing roles that involve the identification and marketing of derivatives to corporate customers.