Bond and Money Markets: Mechanics and Main Uses (Cash and Derivatives)

LEVEL: INTRODUCTORY LEVEL

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▪	Pragmatic presentation of money and bond markets
▪	Choose the most relevant products as investors or issuers
▪	Impact of the crisis on bond and money markets
▪	Trading simulation with FIRST TRADING ROOM©

▪	Know the market conventions and uses of the main fixed-income products (cash and derivatives
▪	Know the key-players and the organisation of the bond primary market
▪	Master the characteristics of a new issue
▪	Master the fundamentals of bond pricing
▪	Know the sensitivity of fixed-income products to interest rates
▪	Get familiar with the notion of convexity
▪	Know yield curve strategies
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▪	Practical presentation of the mechanics
▪	and main uses of bonds (cash and derivatives)
▪	Choose between various products in accordance with investment or funding objectives

▪	Fixed income fund managers
▪	Junior sales and traders
▪	Primary markets participants
▪	Brokers
▪	Fiscal and legal department
▪	IT
▪	Support staff: middle office, senior back office
▪	Internal controls, audit
▪	Institutional investors
▪	Corporate treasurers

Mechanics and Main uses of Monetary Products

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Interest rate conventions

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Money market references: EONIA/SONIA, LIBOR/EURIBOR

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Interbank products: deposits and repo

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Short term notes

TBills

Certificate of deposit

Commercial Paper

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Market practice and quotation

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Short term yield curve

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Role of Central Banks

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Practical workshop
. Repo pricing
. Short term note pricing

Bonds: Characteristics and Uses

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Pricing, phases and timeline of a new issue

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Syndication techniques

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Bond characteristics

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Yield to maturity and spreads

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Bonds: main categories and uses

Fixed coupon bond

Floating rate note

Zero coupon bond

Index-linked Bonds (CMT and inflation-linked)

Convertibles

CDOs

Covered bonds

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Stripping a bond

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Yield curve analysis

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Managing bonds: duration, sensitivity, convexity

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Practical workshop
. Build a bond pricing spreadsheet in EXCEL™
. Calculate the price, duration, modified duration and convexity of a bond

Mechanics and main uses of bond futures

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Main characteristics of contracts

Short term interest rate futures

Bond futures

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Hedging a bond portfolio with futures

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Risk management

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Trading Simulation

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Trade bonds and bond futures vs the computer and other participants in hectic market conditions.
Maximise your profits while maintaining sound risk management.