Forwards and Futures Participants gain a broad perspective of both futures and forwards markets, and understand the important role they play in the world economy. |
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| Traders, sales professionals, back office professionals, financial analysts, cash/money managers, auditors, compliance professionals, financial and bank
officers, accountants and regulators. |
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| No advance preparation required. |
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Students will be able to:- Define futures and forwards
- Understand the markets and participants
- Appreciate futures and forwards as a risk management tool
- Understand pricing of futures and forwards
- Discuss the role of the regulators and exchanges for future and forwards
- Understand futures math and calculate contract value and gains and losses
- Understand margins and leverage in futures contracts
- Explore hedging theories and futures pricing relationships
- Appreciate different approaches for options trading
- Describe options on futures
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Day 1What are futures?- A historical background for futures
- Central marketplaces
- Addressing the risks of producing and processing commodities
- Forward contracts
- The modern futures contract
- Standardization
- The ability to 'offset'
- Futures as risk management tools
- Participants
- Hedgers
- Speculators
- The modern futures industry
- Futures exchanges and floor traders
- Clearing houses and their members
- Futures regulators
- Understanding futures prices
- How prices are expressed
- Daily price information
- Volume and open interest
- Daily price limits
Futures math- Turning futures prices into dollars and cents
- Contract sizes / Contact values
- Point values
- Realized gains and losses
- Purchase and sale statements
- Cash balances
- Unrealized gains and losses
- Marking to the market
- Equity
Margin and leverage in futures trading- What is 'margin' on futures?
- Margin deposits as 'good faith'
- No debit balance; no interest charges
- Leverage in futures trading
- Margin deposit vs. contract value
- Changes in price expressed as a percent
- Return on margin expressed as a percent
- Measuring equity versus required capital
- Original margin
- Maintenance margin
- Treasury bills as margin deposits
- 'SPAN' margin system
The exchange floor- Open outcry
- Executing futures trades: bids, offers, and last trades
- Types of futures orders
- Market
- Limit
- Stop
- Electronic trading
Hedging theory and futures price relationships- Hedging defined
- The theory behind hedging
- Who are the hedgers?
- Illustrating types of hedges
- Short hedges
- Long hedges
- Cash-futures and futures-futures price relationships
- Normal markets
- Carrying costs
- Inverted markets
- Basis
- Basis risk versus absolute price risk
Several approaches to trading- Fundamental analysis
- The underlying concept
- Some points to remember about commodity prices
- Technical analysis
- The theory
- A comparison with fundamental analysis
- Spreads
- Intra-market spreads
- Inter-commodity spreads
- Product spreads
Options on futures- Underlying futures contracts
- Types of options
- Calls
- Puts
- Specifications
- Strike prices
- Premiums
- Expirations
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| Clients who register for this course will receive a complimentary 6 month subscription to the Financial Times and FT.com. The Financial Times is the world's most respected financial newspaper providing a broad assessment on finance, business and the industrial sector. Subscriptions will start within 6-8 weeks of the application process, and are limited to one per client. For questions about your subscriptions call 800-628-8088 or email uscirculation@ft.com. US and Canada enrollees only. |
Lunch included for all students taking day classes. |
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