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Equity Swaps and Options
Overview
A 3-day course covering the foundations of equity markets, including practical experience with equity swaps and options. During this course you will learn how to use equity swaps, dividend swaps, equity index options and single name options. Applications of these products are shown across a variety of strategies across volatility trading, corporate finance and investment management. Key issues in pricing and risk management are also considered.
Key to understanding modern equity market are equity indices, dividends, forwards, equity swaps and equity options. This course will provide delegates with the ability to use, price and manage risk for these key products from a variety of different perspectives.
Equity market indices, dividends, futures and forwards and the building blocks of the equity derivatives market. The course covers the key features and applications of these products. From there, it progresses to equity and dividend swaps. It covers key issues in swap valuation including forward projections, collateral and counterparty risk. Practical applications are taken from examples in corporate finance, M&A activity and investment management.
The second day of the course focuses on advanced issues in trading equity swaps and options. This includes an exploration of the different types of equity option, and their uses in today’s equity markets. The course includes practical applications on how to implement market views and extract value from equity markets from either a trading, corporate treasury or investment management perspective.
The final day of the course looks at several aspects of option pricing. Starting with common themes such as the Black-Scholes model and option hedging, the course goes on to consider little documented real life issues such as how different dividend assumptions impact pricing and risk. It also teaches various strategies to trade views on volatility using equity options.
During the course the delegates get to try out some of the ideas for themselves using Excel spreadsheets which delegates can take away with them. The approach is hands-on and the course is enhanced through many practical examples taken from the themes of implementation of market views, valuation, hedging and risk management.
Learning Objectives
Understand the role of corporate structure, dividends and equity indices in equity markets.
Become familiar with the building blocks of repos / stock lending, futures and forwards – and how to use these products
Understand how to price, and risk manage equity swaps and dividend swaps. Gain experience in their uses in trading, corporate finance and portfolio management.
Learn how to price equity options and the features that make them different from other asset classes. Explore how to use these products for taking equity risk, yield enhancement and portfolio protection
Understand strategies designed to trade / hedge volatility using options
Who the course is for
Equity and Derivative sales, traders, structurers, quants and relevant IT personnel
Asset allocation managers and equity portfolio managers
Company finance executives, corporate treasurers and investment bankers
Risk managers, finance, IPV professionals, auditors and accountants
