Treasury Markets and Products (BF029E)

This program intends to provide an initial basic foundational introduction to treasury markets and financial products, and to explain why some of these financial products were developed in the first instance, and how these products should be properly used, and what some of the inherent risks are when dealing such products, both from the perspective of an end user as well as that of a dealer in a financial institution.  
 

Programme Outline:

An Overview of Treasury Markets

• Some Essential Concepts
  • Definition and Examples of Derivatives
  • Definition
  • Examples
  • Over-the-Counter (OTC) Derivatives
  • Exchange-Traded (ET) Derivatives
  • Development of Financial Markets, Products and Derivatives
  • Purpose of Financial Products and Derivatives
  • Development of the Financial Products and Derivative Markets
  • Evolution of the Financial Markets
  • Future of the Financial Markets
  • Introduction to Term Structure
  • Introduction to Yield Curves and Discount Factor Curves
  • Understand the Various Types of Yield and Discount Factor Curves
  • Understand the True Purpose of Yield and Discount Factor Curves
  • Understand the one-to-one relationship between Yield and Discount Factor Curves
• Understanding The Interest Rate Markets:
  • Introduction to Interest Rate Markets
  • Definition of Interest
  • Interest Calculation Methods
  • Money Market Interest Calculations
  • DayCount Conventions
  • History of Interest Rate Markets
  • Interest Rate Quotation Formats
  • Some Common Interest Rate Benchmarks
  • LIBOR/SIBOR
  • Swap Offer Rates (SOR)
  • Yield and Discount Curves
  • Factors Influencing the Movement of Interest Rates
  • Fundamental Factors
  • Technical Factors
  • Some Key Market Indicators
  • Examples of Interest Rate Exposures
  • Practical Examples of Interest Rate Exposures
  • Overview of Interest Rate Financial Instruments
  • A Discussion on Hedging Strategies
  • Definition of Hedging
  • Direct Hedge
  • Cross Hedge
  • Dynamic Hedge
  • Static Hedge
  • A Discussion on Investment Strategies
  • Direct Investments
  • Indirect Investments
• Basic Interest Rate Products and Derivative Instruments, and Their Applications
  • Different Types of Interest Rates
  • Money Market Rates
  • Spot and Forward Interest Rates
  • Interest Rate Benchmarks
  • Fixed Income Instruments
  • Coupon Bonds
  • Zero-Coupon Bonds
  • Structured Bonds
  • Derivatives on Fixed Income Instruments
  • Interest Rate Derivatives
  • Forward Rate Agreements (FRA)
  • Interest Rate Futures
  • Swap
  • Interest Rate Swap
  • Cross Currency Swap
  • Non-Deliverable Swaps (NDSs
  • Asset Swaps
  • Products and Derivatives Dealing using The PERMIT®1 System
  • Products and Derivatives Dealing
  • Sensitivity Analysis
  • Application of Interest Rate Products and Derivatives to Hedging and Investments
• Understanding The Foreign Exchange Markets:
  • Introduction to Foreign Exchange Markets
  • Definition of Foreign Exchange
  • History of Foreign Exchange Markets
  • Foreign Exchange Quotation Format
  • European Quotation Forma
  • American Quotation Forma
  • Cross Rate Quotation Format
  • Factors Influencing the Movement of Foreign Exchange Rates
  • Fundamental Factors
  • Technical Factors
  • Some Key Market Indicators
  • Examples of Foreign Currency Exposures
  • Practical Examples of Foreign Exchange Exposures
  • Overview of Foreign Exchange Financial Instruments
  • A Discussion on Hedging Strategies
  • Hedging Short Underlying Exposures
  • Hedging Long Underlying Exposures
  • A Discussion on Investment Strategies
• Basic Currency Products and Derivative Instruments, and Their Applications
  • Graphical Representations of Currency Risk
  • Short Position
  • Long Position
  • Currency Forward Contracts
  • Definitions
  • Currency Forward Buy Contract
  • Currency Forward Sell Contract
  • Non-Deliverable Forwards (NDFs)
  • Currency Option Contracts
  • Definitions
  • Types of Options
  • European Options
  • American Options
  • Bermudan Options
  • Other Options
  • Some Common Options Terminologies
  • In-the-Money, At-the-Money, Out-of-the-Money
  • Option Cuts
  • Intrinsic Value
  • Time Value
  • Other Terminologies
  • Greeks - Delta, Vega, etc.
  • Time Value of Options
  • Some Vanilla Option Structures
  • Call Option Spreads
  • Put Option Spreads
  • Straddles
  • Strangles
  • Combinations
  • Risk Reversals
  • Calendar Spreads
  • Other Option Structures
  • Applications of Currency Products and Options To Hedging and Investments
• Extension of Above Notions of Currency Products and Options to Other Markets
  • Equity Markets
  • Commodity Markets