Derivatives: Equity, Currencies and Commodities

Who can Pursue this course:

All the Undergraduates, Graduates(Non Finance and Finance Backgrounds), Those who are keen to make a career in Equity, Advisory, Broking etc.

Duration of the programme

4 Days (4*6 hours programme)

Course Content

1. Equity Derivatives

  • Definition and Terminologies involved in Forwards, Futures and Options
  • How forwards operate practically. Understanding the buyers and Sellers point of view in trade. Pricing     of forwards.
  • How Futures operate, payoff, trading strategies and hedging using index futures. Pricing of Futures.
  • How Options operate, payoff, trading strategies and hedging strategies
  • Greeks
  • Practical Session

2. Commodity Derivatives

  • Meaning and Rationale
  • International Commodity Trading Exchanges
  • Mapping Domestic and International Developments in Commodities Market
  • Commodity Futures in India and Its Regulation
  • Commodities Traded
  • Price Risk Management: Hedging Strategies Using Commodity Futures
  • Trading Strategies: Arbitrage, Spread, and Short-Term Trading
  • Introduction to Options and Option Strategies
  • Practical session

3. Currency Derivatives

  • Derivatives as a Risk Management Tool, Concept of risk; Risk management; Types of traders in the derivatives markets
  • Currency Markets Exchange rate; Fixed and floating exchange rate regime; Factors affecting exchange rates; Concept of quotes; Tick-size; Spreads; Spot transaction and forward transaction
  • Currency Futures Forward contracts; Futures contracts; Pricing of futures contracts
  • Strategies using Currency Futures Hedging, speculation and arbitrage in currency futures
  • Introduction to Options and Option Strategies
  • Practical Session

4. Interest Rate Derivatives

  • Interest Rates and Time Value Of Money Introduction; Factors affecting the level of interest rate; Impact and classification of interest rate and Present value, Future value and Discount factor.
  • Money and Fixed Income Markets
  • Government Bonds Introduction to and Characteristics of Bonds; Concept of yield; Relationship between bond price and interest rate; Repo and cost of funding and other bond terminology.
  • OTC Derivatives, Exchange traded contracts and key terminology of futures market.
  • Interest rate futures; Rationale; Contract specifications; Settlement and Risk Management.
  • An Explanation of Key Concepts in IRF: Why a notional bond is being used as underlying; Conversion factor; Invoice price; Cheapest to deliver bond; Bond basis.
  • Applications and Trading of Interest Rate Futures Participants in the IRF market; hedging applications of interest rate derivatives; Speculation and Arbitrage strategy.

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