The course will explore the main markets for futures and the extra consideration versus forwards including exchanges, clearing houses & margin calculation methods discussed and illustrated with case studies. Taking a natural progression from futures contracts, we will move into discussion of the options contract. To broaden your knowledge of the use of derivatives in capital markets, linking ECM and DCM discussions, you will examine how derivatives can enhance the product offered to clients of a business. Many products and solutions will be discussed including treasury locks and interest rate collars. You will gain a broader understanding of credit derivative products and features. A case study will be used to fully understand the logistics in trading single name CDS including all risks and considerations.
An exciting end to the course will be the trading simulation. You will be part of a team tasked with creating a market, both spot and derivative, in a defined asset. Teams must maximise profit whilst monitoring all of their risks (using the models used earlier). You will need to trade within prescribed risk limits on all of the Greeks and decide on the best strategy to ensure you are monitoring counterparty risk as well. This exercise will allow you to show your trading skills as well as the ability to read the market (volume, prices and volatility) while working under pressure as part of a team.