London Metropolitan University Research Institutes
 

LFA224 Equity Derivatives

1. Course Overview

This programme will start by providing a practical background to the basic equity derivative building blocks. These instruments will be developed to consider the construction and reverse engineering of popular equity structured products. The programme will also cover dynamic risk analysis and reality checks for the instruments discussed. Throughout the programme use will be made of spreadsheets and Bloomberg™ to develop a sound practical understanding of the pricing and applications to which equity derivatives can be put.

2. Who will gain from the course

This two-day programme has been specifically designed for participants who need a comprehensive understanding of both exchange traded and over-the-counter equity derivatives and structured products.

The course will be especially relevant to: bankers, institutional investors, back office and IT staff, sales and marketing staff engaged in selling financial products, equity traders and swaps brokers, risk managers, investment portfolio managers, bank internal auditors, compliance staff, trustees, independent financial advisers, journalists and consultants working in the area of finance, and accountants.

3. Prerequisite Knowledge

An understanding of financial markets and the roles played by institutions in global markets, a knowledge of futures and options contracts to an introductory level.

4. Structure of the Course

+ + Day 1: + +

Basic Instruments

  • Identifying Risk Exposure
  • Diversifying Risk and the role of modern equity market instruments
  • Exchange Traded Funds (ETFs) and Trackers
  • Equity Index Futures, ETF Futures, Equity Swaps (CFDs), and Universal Stock Futures (USFs): Speculation, position taking, risk hedging, short/long portfolios, financial engineering
  • Exchange traded options: American, European, and FlexTM-style options: Option characteristics, strategies (naked and covered positions), option pricing
  • Workshops: Option versus futures hedge, naked option strategies

+ + Day 2: + +

  • Financial markets and products
  • OTC 'Exotic' options: Binary, barrier, chooser, lookback, forward start options. Relationship to Exchange traded options
  • Medium and Longer term Equity Swaps: Fixed and variable notional principal. Capped and floored structures
  • Basic guaranteed products: structure and replication
  • Guaranteed products with embedded options: callable, cliquets, reverse cliquets
  • Workshops: Constructing and hedging an equity swap, creating and valuing a guaranteed structured product

5. Course Delivery

There will be a 1-hour break for lunch and two coffee breaks during each day. Teaching will take place in dedicated seminar rooms, IT labs and the Bloomberg™ Research and Trading Room. To achieve the best training results and to encourage interaction between the participants the course will normally be delivered to small groups of up to 15 delegates.

6. Benefits

This 2-day course will equip you with the tools, knowledge and understanding to:

  • Price a variety of plain vanilla and exotic options
  • Undertake simple and complex futures and option hedges
  • Construct structured equity products
  • Reverse engineer structured products
  • Identify and manage risk

7. Venue

London Financial Academy,
London Metropolitan University,
84 Moorgate, London EC2M 6SQ






 

   Page last updated 07 October 2011