Derivatives Training Courses
The Fundamentals of Derivatives
Ref: FOD-185
The Fundamentals of Derivatives
IN-PERSON OR REMOTE CLASS
Duration: 2 days
➕ Remote learning activity
1850,00 € VAT Exempt (*)
📌 Reference: FOD-185
(*) As a training organization, Finance Tutoring benefits from a VAT exemption under Article 261-4-4° of the French General Tax Code (CGI).
Training Description
The Fundamentals of Derivatives
Derivatives, often considered by some—like Warren Buffet—as financial weapons of mass destruction, were originally created to hedge various risks, including interest rates, foreign exchange, commodities, and credit.
Origin and History of Derivatives
Historical records show their use in 17th-century Japan when farmers sought to lock in future sales prices for their rice production.
Role and Functioning of Derivatives
While derivatives can be used for pure speculation, they also enhance price formation through continuous arbitrage in financial markets. These instruments are powerful tools for risk transfer, borrowing concepts and terminology from the insurance industry.
Target Audience and Training Objectives
This financial markets training is designed for anyone who wants to understand the role and functioning of derivatives, as well as the key market participants using them for various strategies.
Derivatives Pricing
This training also provides a detailed approach to pricing fixed derivatives (futures, forwards, swaps) and contingent derivatives (options, swaptions).
Training Objectives
- Understand the role and functioning of derivatives.
- Differentiate between fixed derivatives and contingent derivatives.
- Understand the difference between price and value.
- Distinguish between a future and a forward contract.
- Comprehend how options work, including "the Greeks."
- Identify the main uses of derivatives: hedging, speculation, and arbitrage.
- Analyze different strategies involving derivatives.
- Understand the variables that affect the pricing of derivatives.
Target Audience
- Bank treasurers
- Corporate treasurers
- Financial engineers
Training Duration
- 2 days (14 hours)
Training Program
The Fundamentals of Derivatives
I. Role, Characteristics, and Typology of Derivatives
- Hedging vs. Speculation Instruments
- Regulated Market vs. Over-the-Counter (OTC)
- Some Key Figures
- Difference Between Price and Value
- Recent Regulatory Developments
- Typology of Main Derivatives:
-
- "Firm" Derivatives
- "Conditional" Derivatives
Quiz
II. "Firm" Derivatives
- Futures and Forwards
- Swaps
- FRA (Forward Rate Agreements)
Practical Case:
- Use of Firm Derivatives for Hedging and Speculation
III. Conditional Derivatives
- Vanilla Options: Call, Put, Analysis of "Greeks"
- Exotic Options
- Structured Products
- Swaptions
Practical Cases:
- Manipulation of an Option Pricer
- Analysis of a Structured Product
IV. Pricing and Valuation Principles
- Conceptual Framework: No-Arbitrage, Risk-Neutral Probability
- Valuation of Firm Products: Discounting Approach for Futures, Forwards, and Swaps
- Option Pricing: Black-Scholes Model, Binomial Approach, Monte Carlo
- Sensitivities and "Greeks": Delta, Gamma, Vega, Theta, Rho
- Advanced Models: Stochastic Volatility, Pricing of Exotic Options
Practical Cases:
- Simulation of Option Pricing Using a Black-Scholes Pricer
- Impact of Implied Volatility on Option Valuation
Test Your Knowledge!
Assess your knowledge and enhance your learning.
- ✅ Identify your strengths.
- ✅ Focus on key concepts.
- ✅ Improve your efficiency!
📌 Dive Deeper into the Topic
Want to better understand risk management mechanisms and their application in financial risk management? Explore our detailed articles:
📖 Understanding Wrong-Way Risk in Simple Terms 📚 Understanding Funding Value Adjustment in Simple Terms