UNDERSTANDING DERIVATIVES

By Comeandsee Global | 27 Jul 2021

Courses Details

Synopsis

This course covers the derivative contracts. It begins with the raison d’être for derivatives and the futures contracts before moving onto options on various underlying assets and indices. Emphasis is placed on understanding the mechanics of the contracts, their uses for hedging risks or implementing investment views as well as potential pitfalls associated with their use. The discussion on option valuation and option risk measures focus on how various factors affect the values of options qualitatively.

Objectives

• Know what derivatives are.
• Know the users of derivatives and why they use them.
• Know the two main groups of derivatives.
• Understand the difference between a spot transaction and a futures contract
• Know what going “long” and “short” mean
• Know how a forward contract compares with a futures contract
• Know the mechanics of a futures contract
• Know the use of futures for hedging risks and for speculative purposes
• Know the various types of risk in using futures, such as basis risk, market–to–market risk, liquidity risk and leverage
• Know the key features to note in a futures term sheet
• Understand the similarities and differences between futures and options
• Know the mechanics of an option contract and its P&L computation
• Know that options provide asymmetric risk–reward trade-offs compared to a spot trade or futures contract
• Know how to classify an option as in-the-money, at-the-money or out-of-the-money
• Know how to relate the value of an option to its “time value” and “intrinsic value” components
• Know how to compute the breakeven price for an option trade
• Understand the wide variety of choices when it comes to hedging risks
• Understand the options linked to stock indices, bonds, interest rates and currencies
• Know how various factors such as spot price, interest rates and volatility affect an option’s value
• Understand the Black–Scholes model and the notion of implied volatility
• Know the risk measures typically associated with an option
• Know about various types of warrants
• Know the mechanics of exchange traded warrants
• Know how the notional size of the interest rate derivative contracts compare with those of derivatives on other underlying assets or instruments
• Understand the mechanics of interest rate swaps and their use in asset–liability management
• Know how a cross–currency swap may be used for hedging the risk of a bond issuance in a foreign currency as well as for investment purpose
• Understand some of the risks associated with these swaps

Funding

FTS funding is available for this course for Singapore citizens & PR. Please email us at enquiries@comeandsee.com.sg and we will reply to you within 2 working days.

For concessionary fees, please email us at enquiries@comeandsee.com.sg.

If you wish to apply for FTS funding, please send us an email at enquiries@comeandsee.com.sg and we will reply within 2 working days.

Courses syllabus

TITLE	ESTIMATE TIME
Understanding Derivatives
Introduction to Derivatives	15:00
Futures Contracts	35:00
Users of Future Contracts	25:00
Options Part 1	40:00
Option Part 2	40:00
Uses of Options	25:00
Types of Options Part 1 – Stock Index Options and Interest Rate Options	25:00
Types of Options Part 2 – Currency Options and Determinants of an Option’s Value	30:00
Types of Options Part 3 – Options Valuation and Risk Measures	20:00
Introduction to Warrants	45:00
Introduction to Swaps	30:00

$220 | CPD: 5.5 hrs

DR CHAN ONN – Lead Content Expert
Dr Chan has more than 30 years of mathematical and financial expertise in both academic and corporate organisations.