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Derivatives Fundamentals

This two-day course will give participants a thorough background and understanding of the main derivative products, both exchange traded and over the counter (OTC). These are futures, options and swaps with a step-by-step guide to the products, applications, risks and documentation. We also introduce participants to credit derivatives and focus on how the market is structured and the various participants.

We review market developments such as EMIR and the importance of timely and efficient settlement of trades and management of collateral.


Anyone needing to know more about derivatives, including treasurers and their staff, accountants and auditors, financial controllers, bankers, credit and legal professionals. 

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Learning Objectives

Delegates will gain

  • An understanding of interest rates both short and long term, and the interplay between floating (bank loan) and fixed (bond) products
  • A clear understanding of the impact that currency and interest rate movements can have on a company
  • A practical introduction to the major risk management instruments and techniques
  • How derivatives and why derivatives are used to effectively manage risk
  • How to evaluate, monitor and control risks, and formulate an appropriate hedging policy


No prior knowledge is required.

Course Content

Day One

Market background

  • Definition
  • Futures, FRAs, Options, Swaps
  • Exchange Traded vs Over the counter (OTC)
  • Credit Risk and Gearing

Market Participants

  • The Sell side vs The Buy side
  • Brokers and Custodians
  • Information providers, IT specialists
  • Post trade processing agents

Underlying asset classes

  • Interest rates, Currency, Equity, Commodities, Credit

Financial futures

  • Definition and key features
  • Terminology
  • The role of the Clearing House
  • Market operations
    • Initial and Variation Margin
    • Marking to Market

Forward Rate Agreements (FRAs)

  • Definition and key features
  • Terminology
  • Understanding forward/forward rates
  • Examples and Applications


Day Two

Interest Rate and Currency Swaps

  • Definition and key features
  • Terminology
  • Range of swap types including “vanilla”, fixed/floating, basis and currency swaps,
  • Risk management with swaps


  • Definition and Key features
  • Terminology and the basics of volatility
  • Traditional Vs exotic options
  • Currency and Interest Rate Options

Credit Derivatives

  • Definition and key features
  • Buying and selling credit protection
  • What is a Credit Event?
  • Credit Default Swaps
    • Applications and examples
    • CDS pricing in practice- global sovereign debt

Derivatives Documentation

  • ISDA Master Agreement
  • ISDA Products

Recent Initiatives

  • Regulations – Dodd Frank, EMIR
  • OTC to exchange migration
  • Cleared Derivatives
  • Swap compression

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Online Courses

You may prefer an online course if you are looking for a flexible and cost-effective solution. Online courses allow you to study at your own pace, at a time that suits you.

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