This Basic Financial Engineering / Derivatives Course will discuss the following:
- Module 1: General Introduction to the Derivatives Market.
- Module 2: Forward and Futures Markets.
- Module 3: Options Market.
- Module 4: Swaps Market.
- Module 5: Caps, Floors and Collars.
- Module 6: Regulations of Derivatives Market.
Participants Must Be With Their Computers
Module 1: General Introduction to the Derivatives Market
- What is Derivatives Instruments?
- Differentiating Between Financial Derivatives and Commodity Derivatives
- Functions of the Derivatives Market
- Derivatives and Economic Development
- Economic Development Drives and Derivatives
- Introducing Derivatives into Nigeria Financial Market
- Advantages of Derivatives
- Problems of Derivatives
- Introduction to Futures, Options and Other Types of Derivatives
Module 2: Forward and Futures Markets
- Forward Contracts Definition
- Characteristics of Forward Contracts
- Benefits of Forward Contracts
- Problems of Forward Contracts
- Types of Forward Contracts
- Futures Contracts Definition and Explanation
- Uses of Futures Contracts
- Comparing Futures and Forward Contracts
- Clearing House and Functions
- Margin Requirements
- Marking to the Market Process
- Fungibility of Contract and Its Consequences
- Futures Traders Classifications
- Liquidating Futures Positions.
Module 3: Options market
- Options Defined and Explained
- OTC Options and ET Options Compared
- Risk and Return Characteristics of Options
- Comparing Options and Futures
- Options Positions and Payoff
- Long Call Position
- Long Put Position
- Short Call Position
- Short Put Position
- Moneyness of Options
- Intrinsic Values for Calls and Puts.
Module 4: Swaps Market
- Swap Defined and Explained
- Features of Swaps
- Participants in Swaps Market
- Contract Specifications
- Confirmation and Master Agreement
- Uses / Application of Swaps
- Swap and Forward Compared
- Termination of Swaps
- Swap Cash flows
- Day Count Rules
MODULE 5: Caps, FLOORS and Collars
- Caps Defined and Explained
- Caps Calculations and Case Studies
- Floors Defined and Explained
- Floors Calculations and Case Studies
- Comparing Caps and Floors to Options Call and Put
- Applications of Caps, Floors and Collars
- Module 6: Regulations of Derivatives Market
- Purpose of Derivatives Regulations
- Different Regulatory Approaches
- Principles Based Regulation
- Rule Based Regulation
- Regulatory Models
- Elements of Derivatives Regulations
- OTC Derivatives and Regulation
- Regulatory Arbitrage
- Derivatives Mishaps, Lessons and Caution