1. Course Overview
The programme will be practical and will make use of spreadsheets and the Academy's Bloomberg Terminals™ to develop a sound practical understanding of equity and interest rate futures. Initially the programme will briefly discuss the role of futures and their place in global financial markets. The major exchange traded futures will be introduced their contract specifications analysed and clearing and settlement discussed. Once the institutional framework has been covered the programme will move on to examine popular trading strategies, standard pricing methods, measurement of volatility, and the uses to which futures can be put.
2. Who will gain from the course
This one-day programme has been designed to appeal to those who need to gain a comprehensive understanding of the applications and operational characteristics of futures contracts. The programme will appeal to participants employed directly in the financial services sector or in a capacity where a need to understand the benefits and risks associated with financial instruments and specialised financial products is important. In particular the course will be relevant to: institutional investors, back office and IT staff, sales and marketing staff engaged in selling financial products, risk managers, investment portfolio managers, bank internal auditors, compliance staff, trustees, independent financial advisers, journalists and consultants working in the area of finance, and accountants.
3. Prerequisite Knowledge Required
Basic knowledge of financial instruments, financial markets, and familiarity with spreadsheets - particularly Excel.
4. Structure of the Course
- The major derivative exchanges: their historical context and roles in modern global financial markets. Their relationship to underlying security markets. The role of the exchange. Electronic versus open outcry trading, mechanics of trading.
- The function of the clearing house, margining, profit/loss calculations.
- Futures contracts: Futures definition. Contract specifications for: equity indexes, individual stocks, short-term interest rates, bonds, swaps and volatility.
- 'Fair' futures pricing. Basis and types of basis risk.
- Uses of futures: speculation, hedging, financial engineering, arbitrage.
- Long/short hedge fund strategies.
5. Course Delivery
Teaching will take place in dedicated seminar rooms, IT labs and the Bloomberg™ Research and Trading Room. To achieve the best training results and to encourage participation and interaction between the delegates the course will normally be delivered to small groups of up to 15 delegates.
This 1-day course will equip you with the tools, knowledge and understanding to:
- Appreciate the institutional framework in which futures are traded and used;
- Calculate a 'fair' futures price;
- Identify market and risk;
- Construct and analyse the effectiveness of simple one period futures hedges;
- Undertake more complex futures hedges;
- Construct and analyse the effectiveness of long/short strategies.
7. VenueLondon Financial Academy,
London Metropolitan University,
84 Moorgate, London EC2M 6SQ