FX 1: Cash and Derivative FX Products – Characteristics and Uses

Introduction: the Foreign Exchange (FX or Forex) Market
  • Overview: players, mechanics and transaction types
  • Anticipating markets: macro-economic analysis / technical analysis
  • FX market order: from the customer to the trader
  • Practical workshop
  • Life cycle of a spot FX trade
  • Characteristics and use of standard FX instruments
  • Main characteristics of the spot market
  • Key-players and main currency pairs
  • Market conventions
  • Relationship between the FX market and commodities: study of the oil and gold markets
Speculation and hedging
  • Carry trade: study of NZD/ JPY and USD/JPY
  • Hedging FX debt
  • Practical workshop
  • Borrowing Yen before and after the crisis
Non-conditional FX derivatives
  • Discounting process
  • Forward FX: discount/premium, calculation
  • Non-Deliverable Forward : examples of KRW and BRL
  • FX swaps
  • Cross currency swaps
  • Practical workshop
  • Managing intercompany funding
  • Hedging an export exposure via an FX swap
  • Forward FX for maturities exceeding 1 year
  • Practical workshop
  • Calculating forwad FX rates in EXCEL™
  • Hedging forward FX with FX swaps
  • Study of the EUR/USD basis swaps in 2007-2008
Characteristics and Uses of Standard and Exotic FX Options
  • FX option quotations
  • Introduction to pricing models
  • Sensitivities to price components: delta, gamma, vega, theta, rho
  • Import/export hedging strategies (with standard and exotic options)
  • Practical workshop
  • Structuring a product: the FX target

  • Understand the FX market and its role within capital markets
  • Know the mechanics and uses of vanilla and exotic FX derivatives
  • Understand how FX derivatives are priced
  • Understand the carry trade
  • Understand vanilla and exotic FX option trading strategies
  • Analyse the anticipations and contraints of corporate treasurers and the way they hedge FX exposure
  • Fundamentals of FX markets and products to help decision-making and negotiations
  • Essential knowledge for any bank associate who has to deal directly or advise customers on FX markets
  • Practice ofmajor strategies based on standard and exotic FX risk management
  • FX trading simulation via the First Trading RoomTM, our virtual market trading simulator
  • Sales
  • Back office and middle office
  • Internal controls, audit
  • Junior FX traders, junior fund managers
  • Financial intermediaries
  • Corporate treasurers
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