Training Courses

Introduction to Derivatives

Category: Derivatives

Course level: Introductory

Open

This 3-hour workshop is designed to provide a fast-track introduction to the main derivative contacts and their uses by investment managers.

No prior knowledge is assumed and all terms will be fully explained. Case studies form an integral part of the course, to allow the delegates to consolidate the information and provide the basis for group discussions.

Objectives

By the end of the workshop, delegates will have a better understanding of:

  • forwards and futures, options, swaps and CFDs trading and margining
  • the role of the exchange and clearing house
  • common strategies – hedging, asset allocation and speculation
  • UCITS III regulations
  • valuing derivatives in client portfolios

Length

3 hours

Course Content

Forwards and futures

Trading and settlement
OTC vs exchange-traded contracts
Uses of both types

Valuing contracts

What is the fair value for a contract?
    Calculating the forward delivery settlement price
    What is basis?
    What affects the price of a contract?
    What is a tick?
    Calculating the closing settlement price (EDSP)
    Contango and Backwardation
Case study: Calculating the fair price for an index future

Trading futures contracts

The main derivative markets
Electronic vs open-outcry trading
Opening and closing out positions

Clearing

Role of the clearing house
    Role of clearing brokers
Novation
Margining positions
    Initial margin, variation margin and maintenance margin
Securitising derivatives positions
    Cash buffers, using other collateral
Case study: Margining a futures contract
 

Index futures

Valuing index futures
How do portfolio managers use index futures?
Hedging, asset allocation, securitising cash
Case study: Hedging a portfolio using index futures
Case study: Asset allocation using index futures

Options

Puts and calls
American vs European options
Options vs futures

Swaps and CFDs

What are CFDs?
Using CFDs in portfolio management
Worked example of a CFD

Regulations governing the use of derivatives by portfolio managers

COLL Chapter 5 (UCITS III rules) for authorised funds
Non-UCITS Retail (NURS rules)
Qualified Investor Schemes rules
Hedge funds

Accounting for derivatives in portfolios

Valuing futures and forwards held in portfolios
Associated economic exposure
Cash/stock adjustment
Gearing
Impact on the balance sheet and P&L
Implications for performance measurement

This course would be suitable for:

  • Client services and call centres
  • Finance and accounting
  • HR and training
  • Investment administration and operations
  • Investment professionals
  • IT and software developers
  • Legal & Compliance
  • New entrants
  • PR and recruitment firms
  • Risk management
  • Sales and marketing

This course would be suitable for these exams:

  • CFA - Level 1
  • CFA - Level 2
  • IMC
  • SII Certificate - Derivatives
  • SII Certificate - Securities & Financial Derivatives
  • SII Diploma - Financial Derivatives
  • SII Diploma - Global Operations Management
  • SII IAQ - Exchange-Traded Derivatives Administration
  • SII IAQ - Introduction to Securities & Investments
  • UKSIP - Introduction to Investment

Available dates

9/12/2008 09:00-12:30EdinburghGBP 350.00 Ex. VAT
GBP 411.25 Inc. VAT		Book Now
11/12/2008 09:00-12:30JerseyGBP 350.00 Ex. VAT
GBP 411.25 Inc. VAT		Book Now
7/5/2009 09:00-12:30LondonGBP 350.00 Ex. VAT
GBP 411.25 Inc. VAT		Book Now
12/5/2009 09:00-12:30EdinburghGBP 350.00 Ex. VAT
GBP 411.25 Inc. VAT		Book Now
20/5/2009 09:00-12:30DublinGBP 350.00 Ex. VAT
GBP 411.25 Inc. VAT		Book Now
18/6/2009 09:00-12:30JerseyGBP 350.00 Ex. VAT
GBP 411.25 Inc. VAT		Book Now
7/10/2009 09:00-12:30EdinburghGBP 350.00 Ex. VAT
GBP 411.25 Inc. VAT		Book Now
18/11/2009 09:00-12:30DublinGBP 350.00 Ex. VAT
GBP 411.25 Inc. VAT		Book Now
26/11/2009 09:00-12:30LondonGBP 350.00 Ex. VAT
GBP 411.25 Inc. VAT		Book Now
2/12/2009 09:00-12:30JerseyGBP 350.00 Ex. VAT
GBP 411.25 Inc. VAT		Book Now

All course fees are subject to UK VAT (17.5%) where applicable. For payments made in Euros, VAT/TVA will not be added on receipt of the client's VAT No.