course bundle
UNDERSTANDING DERIVATIVES
This course covers the derivative contracts. It begins with the raison d’être for derivatives and the futures contracts before moving onto options on various underlying assets and indices. Emphasis is placed on understanding the mechanics of the contracts, their uses for hedging risks or implementing investment views as well as potential pitfalls associated with their use. The discussion on option valuation and option risk measures focus on how various factors affect the values of options qualitatively.
*IBF – FTS Accredited.
- What derivatives are
- The users of derivatives and why they use them
- Two main groups of derivatives
- The difference between a spot transaction and a futures contract
- What going “long” and “short” mean
- How a forward contract compares with a futures contract
- The mechanics of a futures contract
- The use of futures for hedging risks and for speculative purposes
- The various types of risk in using futures, such as basis risk, market–to–market risk, liquidity risk and leverage
- The key features to note in a futures term sheet
- The similarities and differences between futures and options
- The mechanics of an option contract and its P&L computation
- That options provide asymmetric risk–reward trade-offs compared to a spot trade or futures contract
- To classify an option as in-the-money, at-the-money or out-of-the-money
- How to relate the value of an option to its “time value” and “intrinsic value” components
- To compute the breakeven price for an option trade
- Learn that there is a wide variety of choices when it comes to hedging risks
- See examples that compare the outcomes from using futures contract and option for hedging risk, and for speculation
- Learn about options linked to stock indices, bonds, interest rates and currencies
- Learn how various factors such as spot price, interest rates and volatility affect an option’s value
- Encounter the Black–Scholes model and the notion of implied volatility
- Know the risk measures typically associated with an option
- About various types of warrants
- The mechanics of exchange traded warrants/li>
- How the notional size of the interest rate derivative contracts compare with those of derivatives on other underlying assets or instruments
- The mechanics of interest rate swaps and their use in asset–liability management
- How a cross–currency swap may be used for hedging the risk of a bond issuance in a foreign currency as well as for investment purpose
- About some of the risks associated with these swaps
FTS funding is available for this course for Singapore citizens & PR. Please email us at enquiries@comeandsee.com.sg and we will reply to you within 2 working days.
For concessionary fees, please email us at enquiries@comeandsee.com.sg.
If you wish to apply for FTS funding, please send us an email at enquiries@comeandsee.com.sg and we will reply within 2 working days.
| title | estimate time |
|---|
| Understanding Derivatives | |||
| Introduction to Derivatives | 15:00 | ||
| Futures Contracts | 35:00 | ||
| Users of Future Contracts | 25:00 | ||
| Options Part 1 | 40:00 | ||
| Option Part 2 | 40:00 | ||
| Uses of Options | 25:00 | ||
| Types of Options Part 1 - Stock Index Options and Interest Rate Options | 25:00 | ||
| Types of Options Part 2 - Currency Options and Determinants of an Option's Value | 30:00 | ||
| Types of Options Part 3 - Options Valuation and Risk Measures | 20:00 | ||
| Introduction to Warrants | 45:00 | ||
| Introduction to Swaps | 30:00 | ||
Dr Chan Onn
