Derivatives and Risk Management Training Course

Derivatives and Risk Management Training Course

This comprehensive five-day course is designed to provide a deep understanding of financial derivatives and their critical role in risk management. Participants will learn the mechanics of various derivative instruments, from forwards and futures to options and swaps, and how to use them effectively to hedge against market volatility, interest rate fluctuations, and other financial risks. The training emphasizes both the theoretical underpinnings and the practical applications of derivatives in modern finance.

The course curriculum begins with a foundational overview of derivatives and their markets. We will then dive into the specifics of each major derivative type, exploring their characteristics, pricing, and practical uses. The second half of the course focuses on the application of these instruments for effective risk management, covering topics such as market and credit risk. Participants will learn how to build and implement hedging strategies and understand the ethical and regulatory considerations that govern the derivatives market. The training concludes with an exploration of valuation techniques and the role of speculation.

Who Should Attend the Training

  • Financial analysts and traders
  • Portfolio managers
  • Risk managers
  • Corporate finance professionals
  • Investment bankers
  • Treasury professionals
  • Students of finance and economics

Objectives of the Training

Upon completion of this course, participants will be able to:

  • Demonstrate a clear understanding of the various types of derivative instruments.
  • Explain the mechanics and applications of forwards, futures, options, and swaps.
  • Apply derivatives to create effective hedging strategies for different types of risk.
  • Evaluate and measure different forms of financial risk, including market and credit risk.
  • Understand the valuation principles of derivatives.
  • Navigate the ethical and regulatory landscape of derivatives trading.

Personal Benefits

  • Enhance your technical skills in a specialized and high-demand area of finance.
  • Improve your ability to manage and mitigate financial risk.
  • Increase your confidence in trading and investing with derivatives.
  • Gain a deeper understanding of global financial markets.
  • Advance your career prospects in risk management, trading, and investment banking.

Organizational Benefits

  • Strengthen the firm's risk management framework.
  • Improve the ability to hedge against adverse market movements.
  • Enhance the team’s expertise in a complex area of finance.
  • Ensure compliance with derivatives trading regulations.
  • Improve the profitability and stability of the organization's portfolio.

Training Methodology

The training employs a dynamic and interactive approach to ensure maximum engagement and knowledge retention. Methods include:

  • Interactive lectures and presentations
  • Case studies and group discussions
  • Practical exercises and simulations
  • Q&A sessions
  • Real-world examples and industry insights

Trainer Experience

Our trainers are seasoned professionals with extensive experience in the insurance and financial services industries. They hold relevant certifications and have a proven track record of delivering high-quality, practical training. Their expertise ensures that the course content is not only theoretically sound but also rich with real-world application, providing participants with valuable insights and actionable skills.

Quality Statement

We are committed to providing exceptional training that meets and exceeds industry standards. Our courses are meticulously designed, regularly updated, and delivered by expert trainers to ensure you receive the most relevant and impactful knowledge available. Your professional growth is our primary goal.

Tailor-made courses

In addition to our standard offerings, we specialize in creating custom training programs designed to address the specific needs and challenges of your organization. Contact us to discuss how we can develop a course that perfectly aligns with your team's goals and objectives.

 

Course Duration: 5 days

Training fee: USD 1300

Module 1: Introduction to Derivatives

  • What are Derivatives?
  • The Role of Derivatives in Financial Markets
  • Derivative Markets: Exchange-Traded vs. Over-the-Counter (OTC)
  • Key Terminology: Notional Value, Margin, and Leverage
  • Practical session: A simulated exercise on opening a futures contract.

Module 2: Forwards and Futures Contracts

  • Features of Forward Contracts
  • The Mechanics of Futures Contracts
  • Margin Accounts and Marking-to-Market
  • Hedging with Futures Contracts
  • Practical session: Calculating the profit/loss on a futures position based on price movements.

Module 3: Options: Calls and Puts

  • Understanding Call and Put Options
  • Intrinsic Value vs. Time Value of Options
  • Basic Option Trading Strategies
  • Factors Affecting Option Prices
  • Practical session: A group exercise on using options to hedge a stock portfolio.

Module 4: Swaps and other Derivative Instruments

  • Introduction to Swaps: Interest Rate and Currency Swaps
  • The Mechanics of a Swap Agreement
  • Credit Default Swaps (CDS) and Their Role
  • Understanding Complex Structured Products
  • Practical session: Designing a simple interest rate swap to manage exposure to floating rates.

Module 5: Risk Management Fundamentals

  • Defining and Identifying Risk
  • The Risk Management Process
  • Types of Financial Risk: Market, Credit, and Operational
  • Risk Management Frameworks
  • Practical session: Creating a basic risk register for a company.

Module 6: Market Risk and Credit Risk

  • Measuring Market Risk: Value-at-Risk (VaR)
  • Stress Testing and Scenario Analysis
  • Credit Risk: Default Risk and Counterparty Risk
  • Managing Credit Exposure
  • Practical session: Calculating the Value-at-Risk for a given portfolio.

Module 7: Hedging Strategies using Derivatives

  • Hedging Price Risk with Futures
  • Managing Interest Rate Risk with Swaps
  • Protecting a Portfolio with Options
  • Combining Derivatives for Advanced Strategies
  • Practical session: Developing a comprehensive hedging strategy for a company exposed to commodity price risk.

Module 8: The Role of Derivatives in Speculation

  • Speculation vs. Hedging
  • Leverage and its Impact on Speculative Returns
  • The Dangers of Uncontrolled Speculation
  • Understanding Arbitrage Opportunities
  • Practical session: A simulated trading exercise where participants speculate on a stock price using options.

Module 9: Valuation of Derivatives

  • Pricing Forwards and Futures
  • The Black-Scholes Model for Option Valuation
  • Valuation of Swaps
  • The Importance of Volatility in Pricing
  • Practical session: Using the Black-Scholes model to price a call option.

Module 10: Regulation and Ethics in Derivatives Trading

  • Regulatory Bodies and Their Role
  • The Dangers of Mis-selling and Misrepresentation
  • Ethical Considerations in Derivatives Trading
  • Compliance and Reporting Requirements
  • Practical session: A debate on the ethical implications of using complex derivatives.

Requirements:

·       Participants should be reasonably proficient in English.

·       Applicants must live up to Armstrong Global Institute admission criteria.

Terms and Conditions

1. Discounts: Organizations sponsoring Four Participants will have the 5th attend Free

2. What is catered for by the Course Fees: Fees cater for all requirements for the training – Learning materials, Lunches, Teas, Snacks and Certification. All participants will additionally cater for their travel and accommodation expenses, visa application, insurance, and other personal expenses.

3. Certificate Awarded: Participants are awarded Certificates of Participation at the end of the training.

4. The program content shown here is for guidance purposes only. Our continuous course improvement process may lead to changes in topics and course structure.

5. Approval of Course: Our Programs are NITA Approved. Participating organizations can therefore claim reimbursement on fees paid in accordance with NITA Rules.

Booking for Training

Simply send an email to the Training Officer on training@armstrongglobalinstitute.com and we will send you a registration form. We advise you to book early to avoid missing a seat to this training.

Or call us on +254720272325 / +254725012095 / +254724452588

Payment Options

We provide 3 payment options, choose one for your convenience, and kindly make payments at least 5 days before the Training start date to reserve your seat:

1. Groups of 5 People and Above – Cheque Payments to: Armstrong Global Training & Development Center Limited should be paid in advance, 5 days to the training.

2. Invoice: We can send a bill directly to you or your company.

3. Deposit directly into Bank Account (Account details provided upon request)

Cancellation Policy

1. Payment for all courses includes a registration fee, which is non-refundable, and equals 15% of the total sum of the course fee.

2. Participants may cancel attendance 14 days or more prior to the training commencement date.

3. No refunds will be made 14 days or less before the training commencement date. However, participants who are unable to attend may opt to attend a similar training course at a later date or send a substitute participant provided the participation criteria have been met.

Tailor Made Courses

This training course can also be customized for your institution upon request for a minimum of 5 participants. You can have it conducted at our Training Centre or at a convenient location. For further inquiries, please contact us on Tel: +254720272325 / +254725012095 / +254724452588 or Email training@armstrongglobalinstitute.com

Accommodation and Airport Transfer

Accommodation and Airport Transfer is arranged upon request and at extra cost. For reservations contact the Training Officer on Email: training@armstrongglobalinstitute.com or on Tel: +254720272325 / +254725012095 / +254724452588

 

Instructor-led Training Schedule

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