Equity Derivatives

This one day Understanding Equity Derivatives course covers the major types of equity derivative, including futures, options and Exchange Traded Funds (ETF).

ABOUT THE COURSE

The potential benefits of using equity derivatives, rather than underlying markets, is discussed along with associated risks.

The course explains the key terms used in equity derivative markets and compares and contrasts the use of different types of derivative product to achieve required position-taking or risk-hedging outcomes. Practical, hands-on experience in equity derivative calculations is provided along with analysis of the key drivers behind each derivative type.

The key factors influencing equity options, including the sensitivity measures embodied in the “Greeks”, are covered, along with the key relationships amongst these factors and the fundamental importance of volatility.

WHO SHOULD ATTEND?

  • Financial analysts
  • Quantitative analysts
  • Equity fund managers
  • Pension fund managers
  • Risk managers
  • Investors
  • New financial markets employees

Duration
One day

Learning Objectives

At the end of the course delegates should have a broad understanding of the following subject areas:

  • Principal types of equity derivative
    • Index futures
    • Single equity options
    • Convertible bonds
    • ETFs – tailor-made “baskets” of equities
  • Uses of equity derivatives
    • Position-taking
    • Risk hedging
    • Arbitrage
  • Key terms, including:
    • “Delta One” derivatives
    • Cost of carry
    • The “Greeks” in equity options
  • Risk analysis
    • Analysing risk using payoff profiles
    • Basis risk
    • Counterparty risk

Prerequisites

The course assumes a basic knowledge of equity markets and financial mathematics.

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