Introduction to Capital Markets

LEVEL: INTRODUCTORY LEVEL

▪	Gain an essential understanding of the role of operational staff in financial markets
▪	Trainers recognised for their ability to effectively pass on sometimes complex knowledge
▪	No prerequisite financial or mathematical knowledge
▪	Use of FIRST TRADING ROOM©, in-class trading simulator

▪	Understand how financial markets work and the role of the key-players
▪	Know the characteristics, uses and market conventions of the main financial products
▪	Understand how market, operational and counterparty risks are managed
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▪	New joiners
▪	Support staff: back office, middle office, accounting, IT
▪	Internal or external auditors
▪	Economists and financial market solicitors
▪	Human resources, internal and external
▪	communication
▪	Banking division and support functions in asset management

Multimedia Preparation (Accessible via Internet under FLASHT)
▪	Financial Markets: Organisation and Role of Key Players

Organisation of Financial Markets
▪	Market participants: corporates/individuals/institutional investors/banks/fund managers/brokers
▪	Main markets: interest rate, FX, equity, commodities, credit
▪	Cash and derivative products
▪	Dealing room staff
▪	Practical workshop . Reconstruct the professional layout of a dealing room
Pricing principles of vanilla derivatives
▪	Non-conditional products: forwards and futures
▪	Conditional derivatives: options
▪	Practical workshop . Calculate a forward price . Describe the parameters necessary to price an option
FX Products: Characteristics, Market Conventions and Uses of Cash and Derivative Instruments
▪	Spot FX
▪	Forward FX and FX swaps
▪	FX options
▪	Practical workshop . Calculate a forward FX rate from the spot rate and swap points
Interest Rate Products: Characteristics, Market Conventions and Uses of Cash and Derivative Instruments
▪	Money Markets and Bond Markets
▪	Yield curves and credit spread
▪	Sensitivity and duration
▪	Futures
▪	FRAs, STIR futures, Bond futures
▪	Interest Rate Swaps, Caps & Floors
▪	Practical workshop . Hedge a bond portfolio with cash and derivative instruments
Equity Products: Characteristics, Market Conventions and Utilisation of Cash and Derivative Instruments
▪	Types of equities
▪	How Stock Exchanges work
▪	Types of buy/sell orders
▪	Block trading and dark pools
▪	Futures (stock and indices)
▪	Warrants and equity options
▪	Roles of the custodian and of the clearer
▪	Practical workshop . Explain Beta and hedge an equity portfolio
Commodity markets: Characteristics, Market Conventions and Utilisation of Cash and Derivative Instruments
▪	Types of commodities
▪	Main products traded on commodity markets
▪	Organised commodity markets
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Risk Management
▪	Market risks (VaR and Stress test)
▪	Counterparty risks (Cooke and Mc Donough/Basel II)
▪	Operational risks
▪	Liquidity risks
▪	Practical workshop . Simple VaR calculation 1 day/99%
Trading Simulation
▪	Trade STIR futures vs the computer and other participants in hectic market conditions. Maximise your profits while maintaining sound risk management.