The Fundamentals of Equity Derivatives

Training Description

The Fundamentals of Equity Derivatives

The training course The Fundamentals of Equity Derivatives provides an in-depth understanding of equity-related derivative products and their use in financial markets. Whether you are a portfolio manager, financial analyst, or corporate treasurer, mastering the fundamentals of options, futures, swaps, and structured products is essential.

This course thoroughly covers derivative instruments and their applications, combining theoretical knowledge with practical case studies. You will learn how these instruments work, how to identify their use cases, and how to master the basics of their valuation.

Training Objectives

• Understand the fundamentals of equity derivatives and their role in financial markets.
• Master the functioning of firm derivatives (futures, forwards, swaps).
• Grasp conditional derivatives (vanilla options, exotic options).
• Analyze different categories of structured products and their applications.
• Acquire a methodology for valuing equity derivatives.

Target Audience

• Fund Manager
• Portfolio Manager
• Wealth Manager
• Asset Management Assistant
• Financial Analyst
• Bank Treasurer
• Corporate Treasurer
• Financial Engineer

Training Duration

• 2 days (14 hours)

Training Program

The Fundamentals of Equity Derivatives

I. Role, Functioning, and Key Players in Equity Derivatives

• Role of a Derivative Product
• Regulated Markets and OTC Market
• Key Market Statistics

II. "Firm" Equity Derivatives

• Futures and Forwards: Characteristics, Pricing, and Valuation
• Swaps: Characteristics, Pricing, and Valuation

Practical Cases:

• Example of using CAC 40 futures for hedging an equity portfolio
• Calculating the price and value of a forward contract
• Pricing an equity swap

III. Conditional Derivatives

• Options: Definition and Functioning
• Option Pricing: Binomial Model, Black-Scholes Formula, Monte Carlo Method
• Option Combinations
• Second-Generation (Exotic) Options

Practical Cases:

• Determining the price of an option using a one- and two-period binomial tree
• Analyzing the impact of "Greeks" on option pricing using an option pricer

IV. Structured Products

• Main Characteristics
• Categories
• Capital Protection
• Optimization
• Participation
• Leverage

Practical Case:

• Analysis of a structured product

V. Risk Management and Equity Derivative Strategies

• Hedging Strategies: Delta Hedging, Gamma Hedging, Portfolio Insurance
• Speculative Strategies: Leverage Trading, Short Selling via Options
• Arbitrage: Implementing Spread and Convergence Strategies
• Index Exposure: Using Derivatives to Track an Index

Practical Cases:

• Setting up a delta-neutral hedge on an equity portfolio
• Using options to manage downside market risk
• Arbitraging an option price via put-call parity