Introduction to Foreign Exchange
June 11, 2012
Registration Fee: US$995.00 Register Location Instructor
Many classes sell out; we suggest registering at least one week in advance to ensure availability.
Beginner Level, 7 CPE Credits
Instructor: Kenneth Kapner
Hours: 9:00 am - 5:00 pm; Registration/Breakfast begins at 8:30 am
This hands on one-day course examines the fundamentals of foreign exchange. The features and characteristics, applications, basics of pricing and risks are examined. Applications are explored for the main products including spot, forwards and options. A wide variety of applications are discussed from different end users vantage points including banks, assets managers, institutional investors and speculators.
Objectives:
By the end of the course, the participants will be able to:
- Describe the features and characteristics of spot and forward FX
- Explain the role of a market maker and end user
- Demonstrate how to price forward FX
- Apply forward FX from different client perspectives
- Discuss impact on FX from the credit crisis
- Explain and apply FX Options
Session 1: Foreign Exchange
By the end of the session the course participant will be able to:
- Describe the features and characteristics of spot FX market functions
- Discuss the size, shape and dynamics of the FX market
- Discuss what impacts FX rates
- Determine base and counter/quoted currency
- Distinguish between big figures and pips
- Recognize FX terminology
- Discuss risk management and spot trading limits
Session 2: Forward Foreign Exchange
By the end of the session the course participant will be able to:
- Identify the components of a forward “outright” FX transaction
- Describe and calculate the forward rate through the spot market and money market deposits
- Explain how a forward contract is quoted
- Discuss points, premiums and discounts
- Calculate a forward rate from the spot rate and points
- Apply forwards from an end users vantage point
- Discuss hedging
- Describe the features and characteristics of non-deliverable forwards (NDFs)
Session 3: FX Swaps
By the end of the session the course participant will be able to:
- Describe the structure and mechanics of an FX swap
- Outline how FX swaps are used in place of deposits to hedge an FX outright
- Determine the advantages of using FX swaps
- Differentiate between an outright and a swap
- Recognize how the forward trader earns a profit
- Discuss risk management and forward trading limits
Session 4: Introduction to FX Options
By the end of the session the course participant will be able to:
- Define calls and puts
- Explain different quoting methods
- Describe in, at and out of the money
- Show intrinsic value + time value = premium
- View payoff profiles of the respective options
- Identify the main pricing components of an option
- Analyze basic applications
- Discuss options on NDFs
- Discuss ISDA® documentation