MiFID II - Derivatives (EN)

This module is part of the MiFID II Certification.

Based on the the ISO definition of derivatives specifying that a derivative instrument is a financial contract the value of which is “derived” from the value of underlying instruments or commodities, the content of module 5 on derivatives focuses on:

• Main characteristics of derivatives (based on ISO 10962)
  • Types of derivatives - Exchange-listed derivatives: Options, futures; OTC derivatives: Forwards, swaps, OTC options, others
  • Attributes of derivatives - Type, underlying assets, delivery, standardised/non-standardised
  • Pricing of derivatives - Exchange-listed derivatives (premiums, margin accounts, margin calls), OTC derivatives (swap prices, valuation of forwards)
  • Factors influencing the performance of a derivative - Price of the underlying asset, volatility, liquidity, macroeconomic factors
  • Costs associated with transactions and services involving derivatives - Brokerage, exchange fees, transaction fees, premiums, margin calls, collateral
  • Structure of the market for derivatives
  • Types of markets (regulated, OTC) - Exchange-listed derivatives, OTC derivatives, derivatives on MTFs, OTFs, SIs
  • Market players - Hedgers, dealers, speculators, arbitrageurs, derivatives exchanges, executing brokers, clearing houses, clearing brokers
• Financial instruments as investments
  • Market practice - Hedging, speculation, arbitrage, dealing, leverage
  • Main risks - Market risk, commodities risk, currency risk, liquidity risk, operational risk
  • Tax aspects - Withholding tax, capital gains tax, transaction tax, tax reclamation
  • Market forces that impact performance - Macroeconomic factors, price of the underlying asset, volatility, liquidity, interest rates, currencies
  • Understanding instrument’s performance - Market perspective, macroeconomic factors, volatility, liquidity
  • Documentation related to the instrument - Contract specifications, market

Experienced professional specialists selected on the basis of their in-depth knowledge of markets and financial products under MiFID rules I and II, and ESMA criteria.