School of Derivatives

Description

This five day School of Derivatives provides you with a thorough understanding of the derivatives market for both OTC and exchange-traded instruments. It focuses on how banks use derivatives to manage their own exposures and to provide practical solutions to their customers. This course consists of two parts:

Fundamentals of Derivatives is a comprehensive overview of the major classes of derivatives, distinguishing between linear and non-linear derivatives.

Bank Applications of Derivatives explains, by way of specific examples, how banks use derivatives for their own and their 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.

Summary of course content

• How and why are derivatives used in practice?
• The difference between exchange-traded and OTC derivatives?
• Clearing procedures for exchange-traded 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
• How derivatives are embedded in common structures to provide investors with attractive risk/reward profile