The Mechanics of Derivatives and Financial Products (Online)

IFF Training

How long?

  • 16 weeks
  • online

What are the topics?

IFF Training

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Who should attend

It will prove invaluable to those already working securities and derivatives field who want to expand their knowledge and gain a much more detailedholistic understanding of the products and will prove extremely useful for those working in functions that come into contact with securities and derivatives such as trading, risk, audit, product control and treasury. If you really want to understand how the products work in practice, then you need to look no further than this unique course.

About the course

Course Structure

The course takes place over 16 weeks and comprises eight units. The units will be released every two weeks from the start of the course. Download the units or study completely online.

Assessment and Post Graduate Certification

At the end of each unit there is an assessment that will allow you to benchmark your growth in knowledge and understanding. For those wishing to receive a Post Graduate Certificate from Middlesex University, an additional marked assignment of 5000 words will also need to be submitted. The assignment will be based on an on-going case study that runs throughout the duration of the course.

Syllabus modules

Unit 1 - Equities, global equity markets and indices

  • Understand the defining characteristics of financial securities and their relationship to assets
  • Gain the ability to contrast the nature of financial securities with the derivatives which are structured and dependent upon these underlying securities
  • Increase your understanding of the role that equity plays in the capital structure of corporations
  • Obtain a full comprehensive overview of different types of equities, including warrants and CFDs
  • Enhance knowledge of the issuance of equities and the manner in which they are traded in contemporary markets
  • Benefit from an ability to analyse relationship between the financial performance of companies and the behaviour of their share prices, dividends, management policy etc

Unit 2 - Fixed income securities

  • Understand the main characteristics of fixed incomes instruments which enable a variety of borrowers to raise capital from investors by issuing debt securities
  • Gain a comprehensive overview of global bond markets and the financial and macro-economic drivers of the capital flow into these markets
  • Attain an ability to examine and contrast of the different kinds of bonds – sovereign, corporate, fixed rate/floating rate, asset backed, zero coupon, seniority
  • Obtain a clear understanding of the principles of fixed income mathematics and the sensitivity of bonds to changes in credit conditions and the interest rate environment
  • Obtain a critical consideration of the advantages/disadvantages to issuers and purchasers of securitisation instruments

Unit 3 - Money market securities, foreign exchange and settlement

  • A comprehensive understanding of the role of cash and near cash instruments – including short term government and corporate paper - as primary drivers of money markets and short term interest rates
  • Understand the $5 trillion per day market for foreign exchange – spot, forwards and swaps
  • Gain a detailed comprehension of the role of clearing and settlement in markets including those for equities, FX, bonds, and derivatives
  • Benefit from a full exploration of the role of a variety of financial intermediaries including prime brokers, custodians, investment banks and dealers

Unit 4 - Exchange traded funds and collective investment schemes

  • Get a clarification of the mechanics and rationale for collective investment vehicles/products
  • Comprehension of the historical development of Exchange Traded Funds (ETFs) and an examination of the popularity, scope and usage of these packaged securities
  • Obtain the ability to contrast the costs/benefits, management styles and the principal consumers of different collective investment products
  • Leave with an increased grasp of the of structured investment products – the financial engineering required in product creation and the rationale and benefits to issuers and purchasers
  • Fully understand the role of hedge funds and their different investment styles and strategies

Unit 5 - Futures and exchange traded options

  • Examine the evolution of the futures markets in commodities into the coverage of futures for a wide array of financial instruments
  • Grasp Central Counter Party Clearing (CCP), settlement, collateral/margin management, risk, contrast with bilateral clearing
  • Improve your knowledge of principal futures exchanges and futures contracts
  • Recognise the manner in which exchange traded futures and options are priced, fair value, trading strategies and uses in hedging
  • Gain the ability to critically examine different kinds of options, pricing issues including Black Scholes and binomial models, sensitivities to market factors etc

Unit 6 - Key elements of swaps

  • Leave with the ability to critically assess the role of swaps in contemporary financial markets – their historical development and the role of financial engineering in ongoing innovations and their continuing evolution
  • Examine the legal frameworks for swaps – ISDA Master Agreement, Credit Support Annex (CSA) etc
  • Critically examine the different techniques involving derivatives for addressing interest rate risk and credit default including a case study of the sovereign default of Greece in 2012
  • Analyse in detail Credit Default Swaps in both the corporate and sovereign markets

Unit 7 - Risk management with derivatives

  • A core understanding of the key strands of financial risk management
  • Ability to critically examine some of the key drivers of the kind of systemic risk seen in 2008 which involved counter party credit risk from the use of credit derivatives including correlation, tail risk etc
  • Ability to critically assess the role that derivatives play with regard to creating portfolio risk and, in turn, providing useful techniques for hedging risk for investment managers
  • The capability to examine stress modelling techniques and their relevance to the Basel III regulatory framework

Unit 8 - Trading derivatives, hedging and investment strategies

  • A thorough understanding of the purposes and motivations of the main users of derivative instruments in financial markets
  • Ability to confidently explain the risk/reward matrix regarding the short term trading of derivatives
  • A clear understanding of the use of derivatives with longer term investment horizons can be both a tactical and strategic component of an asset allocation strategy
  • Ability to critically analyse case studies and real world illustrations of how the principal classes of derivatives – futures, options and swaps - can be used to hedge a portfolio of securities

Experts

Clive Corcoran

Clive Corcoran has been engaged in the finance and asset management sectors, on both sides of the Atlantic, for more than 25 years. After completing his education in the UK, Canada and the US, he co-founded and became the CEO of an asset management company based in the USA during the 1980s and 90...

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The Mechanics of Derivatives and Financial Products (Online) at IFF Training

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