Derivative instruments - Step by step - Module 2 - Forward and future

Whoever watched "The wolf of Wall Street" has struggled to understand the jobs, products, jargon that surround the financial markets. Some of us are still trying to get their way out of this financial jungle and clarify the associated strategies. Demystifying financial instruments is the key objective of the step by step programme we propose below.

This training curriculum is designed around 8 complementary building blocks:

Derivative instruments – Step by step - Module 1 - The essentials
Derivative instruments – Step by step - Module 2 - Forwards and futures
Derivative instruments – Step by step - Module 3 - Swaps
Derivative instruments – Step by step - Module 4 - Options
Derivative instruments – Step by step - Module 5 - Credit derivatives
Derivative instruments – Step by step - Module 6 - Securitisation vehicles (under development)
Derivative instruments – Step by step - Module 7 - Structured products (under development)
Derivative instruments – Step by step - Module 8 - Valuation of derivatives - Principles

Our modular approach allows each participant to select his/her entry point in the programme to best fit cumulated knowledge and experience on this wide topic.

Objectives:

By the end of this course, participants will be able to:

• define the general characteristics of each instrument
• gain in-depth understanding of how the instrument operates
• list how it can best be used on the market – be it in single or in combination with other instruments
• understand the valuation method and what can impact the value of it
• identify major risks associated and determine controls that may mitigate them

Principle of a forward or future contract, based on the yield curve; use of these products for hedging or for speculative trading purpose
Forwards contracts: the main types of forwards are presented, namely

• on money market rates: FRAs
• on currencies (forex forward), including NDFs contracts
• on equities and on bonds

Futures contracts:

• the exchange clearing room and margining system
• theoretical vs market price of a future
• invoiced amount at delivery
• analysis of futures contracts,
  • on stocks and stock indexes
  • on currencies
  • on money market rates
  • bond futures
  • commodities futures

The content of the session is illustrated by real market examples. It is given in an attractive, understandable way.

This training will be coordinated by Frédéric Botteman, Partner, PwC Luxembourg. The different modules will be animated by experts in derivatives.
Frédéric, Audit Partner, is specialised in the valuation of derivatives and illiquid securities. Thanks to this, he has gained a high expertise in the audit of guaranteed funds.

Frédéric has developed a strong fund audit experience and is also involved in the expert team in the area of circular CSSF 2002/77 requirements and is instructor in several courses linked to this topic and to derivatives.
Frédéric is also leading several SRI reporting for major IM players.