Markets and Their Workings
An introductory seminar in the way that international
capital markets function. This course will appeal to those who wish to
consolidate a basic knowledge of the market mechanisms and how it functions
in today’s financial markets. This course deals with many derivative
products and securities and has extensive review of structures and pricing
Market structure, participants and products
Investment bank and investor perspectives
Tax and regulatory aspects of markets
Economic function and capital allocation using financial
This course will appeal to persons with a basic working knowledge
of markets who wish to consolidate that knowledge. Previous experience would
Less experienced Traders, sales, support, Internal Audit
Less experienced Fund managers
Less experienced Risk management
Examining the international capital and banking markets:
Explaining the economic background – market economics. Identifying the
market players. Analysing economic variables /indicators /drivers. Sources
of information and its effect on the market
Examining the major instruments: Money market instruments.
Capital market instruments. Foreign
exchange markets. Equity markets
Money market instruments: How they work. How they are priced.
How prices are quoted. Yield curves. Using yield curves to assess value
The bond markets: Eurobond markets and US bond market. Junk
bonds. Originating, syndicating and pricing bonds. Bond ratings.
Relationship of the government bond market with the swaps market [Bond types
Government bond markets: US UK Germany France Japan Australia]. Warehousing.
Documentation implications. Bond volatility and trading techniques
The equities markets: Equities markets in the world. Issuing,
pricing and valuing equity. Options on equities: convertibles, warrants, put
options. Key stock indices and performance measurement. Trading and hedging
with stock index futures and options. The implication of privatisation.
Technology issues – screen-based trading.
Foreign exchange markets: Principles of quoting. What causes
exchange rates to move? –short term factors. Volatility of the forex
markets. Liquidity of the spot and forward markets – the impact of the
capital adequacy requirements. Currency trading blocks. Currency baskets.
The relationship between the spot, forward and interest rate markets. Impact
of Central Banks. The future?
Interest rate forward contracts: Pricing issues. Using forward
Futures markets: Understanding futures. Futures exchanges and
contracts. Commodity futures. Currency futures. Interest rate futures. New
futures contracts. Hedging, trading and arbitraging with futures. Liquidity.
Market characteristics and key players. Hedge ratios. Hedging techniques
The swap market: Interest rate swaps. Currency swaps. Swaps
valuation and hedging. Credit risk and swaps documentation. Warehousing and
zero curves. Applications of swaps – examples. Market overview. Case
study: dual currency swap
options market: Understanding options on: FX, Interest rates, Debt
instruments, Equities, Commodities and swaps, OTC and exchange traded
options. Option pricing theories. Hedging an option portfolio. Option
trading and arbitrage. Liquidity considerations. Exotic options: Asian
options, Lookbacks, Knockouts, Down and outs, Ups and ins, Options on
as hedges: Buying vs. selling options to hedge. Comparison with futures
and swaps. Hedging with American, European, Asian or exotics in-, at-, or
out-of-the-money. Timing and basis risk
as an asset class: Portfolios of options – delta, gamma, theta, vega
risks. Expressing views of volatility. Special risks of exotics
13.Regulatory issues: Implementation of the BIS
Capital Adequacy Assessment Rules. Review of the BIS rules. Implications of
the EC directives. Plus,
comparative study of implementation in the UK, USA and Japan
14.The regulation of market and credit risk
comprehensive and extensively illustrated Handout Notes (see samples
Plus copies of relevant TG2 Books/e-Books
Seminars can be tailored to your trading, risk, client, and systems needs.
Submit your needs, and/or "cut/paste" from other Seminars (see entire "standard"