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Introduction To Options

The course objectives are to: 1) Learn about call options, put options, and option types 2) Differentiate fundamental structures to manage interest rate and currency risks 3) Use an options simulation model to apply concepts to practical examples The training methodology is highly interactive, using exercises and group work. The course is designed for financial sales, relationship managers, credit officers, and corporate treasury staff.

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30 views

Introduction To Options

The course objectives are to: 1) Learn about call options, put options, and option types 2) Differentiate fundamental structures to manage interest rate and currency risks 3) Use an options simulation model to apply concepts to practical examples The training methodology is highly interactive, using exercises and group work. The course is designed for financial sales, relationship managers, credit officers, and corporate treasury staff.

Uploaded by

ssj7cjqq2d
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Introduction To Options

During this programme, participants will


Objectives

§ Learn the difference between call options and put options


§ Differentiate the various option types
§ Explore fundamental structures to manage interest rate risks
§ See how to embed options into structured investments
§ Use a currency option simulation model to put theory into practice

Training Methodology The programme is highly interactive and it will encourage participation
through exercises and group work that the delegates will solve individually
or in small workgroups.

Who Should Attend? This programme is designed for

§ Financial Markets Sales


§ Relationship Managers
§ Credit Officers
§ Corporate Treasury staff

Course Duration 1 Day: 0900 - 1700

© Swapskills FZ LLC
Introduction To Options

Options and Structures § Features of interest rate and currency options


- Clarifying the benefits of options versus forward contracts
§ Checklist for structured product investments

Exercise: Create client checklist for structured products

§ Options types
- European / American / Bermudan / Asian / Path
Dependent
- Features: (Dis)advantages

§ Building blocks
- Understanding payoff diagrams
- Put / call parity
- Creating synthetic long or short positions

§ Fundamental structures
- Basic Calls and Puts
- Risk reversals
- Call spreads
- Straddles / strangles

Exercise: Analysis of suitable hedging structures through mini case


studies

Interest Rate Options


§ Applications for hedging corporate exposures

§ Fundamental structures
- Caps, floors, collars
• Option-linked funding
• Flexi swaps
- Swaptions
• Uses in project finance
• Extendible swaps
• Callable bonds
- Berrmudan options and their applications

§ Ways to reduce premium outlay


- Cap spreads
- Contingent Premium Options
- Step-up strikes
- Limiting caplet exercise

Exercise: Dual currency deposit structure

© Swapskills FZ LLC
Introduction To Options

Structured Deposits / Loans


§ Dual currency loans
- How do they work?
- In what circumstances do they make sense for the client?
- Analyse the risk and opportunity
§ Digital options
- Applications in principal-protected deposits and funding
structures
- (Dual) range accruals
- Semi-fixed swaps
- Range reducer swap

Exercise: Analyse a structured deposit

Suitability and
Appropriateness § Delivering solutions properly
- Suitability and appropriateness
- Reputation risk

Currency Option Simulation


Using an excel-based hands-on pricing model where we will learn to price
up:
• Vanilla currency options
• Call spreads
• Risk Reversals
• Straddles / strangles
• Butterflies
The practical simulation will reinforce the theoretical part of the currency
options course.
The objective of the module is to show how a client’s specific market view
can be translated into a suitable solution for his hedging requirement.

Course Review And Close

© Swapskills FZ LLC

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