DERIVATIVES

Financial Markets Consulting and Training (FMCT) is a specialist provider of financial markets consulting and training services. We provide a wide range of services to our clients including derivatives education, market analysis, risk management, and portfolio management. Our team has decades of combined experience in the financial sector and is committed to helping our clients succeed.

We offer a range of courses and training sessions that are tailored to the needs of our clients. Our programs are designed to help our clients understand the complexities of the derivatives markets and develop the skills needed to make informed decisions. We are proud to be recognised as one of the leading providers of derivatives training services in the industry.

DERIVATIVE TYPES

FMCT offers a wide range of derivative types, from futures and options to swaps and structured products. Our experts have extensive experience in understanding and managing the complexities and risks associated with these types of investments. We provide comprehensive advice and training on these derivative types to ensure their successful implementation.

DERIVATIVES TYPES EXPLAINED

At Financial Markets Consulting and Training (FMCT), our mission is to provide our clients with the knowledge and resources they need to navigate the complex world of financial markets.

Our comprehensive consulting and training services cover all aspects of the financial markets, from derivatives to stocks and bonds. We have a team of experienced professionals who can explain the different types of derivatives and the way they work in a straightforward and easy-to-understand manner. With our help, you can make informed decisions and maximize your investments.

Futures Contracts

Futures contracts are standardised agreements to buy or sell an asset at a predetermined price and date in the future. These contracts are commonly used for hedging against price fluctuations or for speculative purposes. They are traded on organised exchanges and used for hedging or speculation. These contracts specify the quantity, quality, and delivery date of the underlying asset. Settlement can occur through physical delivery or cash settlement. Futures contracts are widely used in commodities, financial indices, interest rates, and currencies.

Options Contracts

Options contracts give investors the choice to buy or sell an asset at a predetermined price within a specific timeframe. They offer flexibility and are used for speculation, hedging, and generating income through option writing. Investors can decide whether or not to exercise the option based on market conditions and investment strategies. Options provide opportunities to profit from price movements, protect portfolios against risk, and generate income through premium collection. However, it's crucial to consider the associated risks.

Swaps

Swaps involve the exchange of cash flows or liabilities between parties based on predetermined terms. Common types of swaps include interest rate swaps and currency swaps. Interest rate swaps involve exchanging fixed-rate and floating-rate interest payments, while currency swaps involve exchanging principal and interest payments in different currencies. Swaps are primarily used for managing interest rate and currency risks, as well as for altering cash flow characteristics.

Forward Contracts

Similar to futures contracts, forward contracts involve the agreement to buy or sell an asset at a specified price on a future date. However, forward contracts are typically customised and traded over-the-counter (OTC) rather than on organized exchanges. These contracts are tailored to meet the specific needs of the parties involved, including the asset, price, quantity, and settlement date. Forward contracts are commonly used for hedging against price fluctuations or for securing future transactions at predetermined terms.

ADDITIONAL NOTES ON DERIVATIVES

Apart from the mentioned instances, the financial markets offer a wide range of other derivative types to cater to specific requirements and fulfill different objectives. Some notable illustrations encompass: It is crucial to acknowledge that the derivatives market is extensive and consistently progressing. With time, new derivative forms may arise to address the evolving demands of market participants. At FMCT, we possess the necessary expertise to assist businesses in developing novel derivative products.

Interest Rate Derivatives

These derivatives are based on interest rates and include interest rate swaps, interest rate options, and interest rate futures.

Currency Derivatives

Currency derivatives allow investors to trade and hedge against fluctuations in foreign exchange rates. Examples include currency futures, currency options, and cross-currency swaps.

Equity Derivatives

These derivatives are linked to the performance of individual stocks or equity indices. Common examples include stock options, stock futures, and equity swaps.

Commodity Derivatives

Commodity derivatives allow investors to trade and hedge against price movements in various commodities. Examples include oil futures, gold options, and agricultural commodity swaps.

Credit Derivatives

These derivatives are based on credit risk and include credit default swaps, collateralised debt obligations (CDOs), and credit-linked notes.

Weather Derivatives

Weather derivatives provide a means to manage weather-related risks. They are often used by industries affected by weather conditions, such as agriculture and energy.

DERIVATIVES TRAINING

The derivatives training provides a comprehensive understanding of derivatives, covering their fundamentals, pricing, trading strategies, and risk management. Participants learn about the definition, characteristics, and uses of derivatives in financial markets. They explore various pricing models, such as the Black-Scholes model, and factors influencing derivative prices. The training delves into different trading strategies like hedging, speculation, and arbitrage, while emphasising risk management techniques and market analysis. Overall, participants gain valuable knowledge and skills to navigate the world of derivatives effectively.

Derivatives Basics

This area covers the fundamentals of derivatives, including their definition, characteristics, and uses in financial markets. Participants learn about different types of derivatives, such as futures, options, swaps, and forwards. The training highlights the practical applications of derivatives in risk management and portfolio diversification.

Derivatives Pricing and Valuation

This area focuses on pricing and valuation methods for derivatives. It explores different pricing models, including the Black-Scholes model, and discusses key factors that impact derivative pricing, such as interest rates, volatility, and time to expiration. The training emphasises the importance of accurately valuing derivatives and understanding the variables that influence their prices.

Derivatives Trading and Strategies

This area focuses on the trading aspects of derivatives. It covers different strategies used in derivatives markets, such as hedging, speculation, and arbitrage. The training also includes risk management techniques and the analysis of market trends and indicators for informed trading decisions

Derivatives Regulation and Risk Management

This area addresses the regulatory framework surrounding derivatives and the importance of risk management. It explores regulations imposed by regulatory bodies, such as the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). It also covers risk measurement and mitigation techniques specific to derivatives markets.

DERIVATIVES CONSULTING

FMCT is a leading provider of derivatives consulting services, specialising in derivatives application and financial management strategy. Our experienced team of professionals offers tailored solutions to navigate complex derivatives markets, maximise returns, and minimise risk. With our expertise, you can make informed decisions, stay ahead in the ever-changing financial markets, and have confidence in your derivatives investment.

Our derivatives consulting services cater to financial market organisations, offering expertise in four key areas. We provide analysis of derivatives products, assessing their features and applications. Additionally, we assist in developing risk management strategies, optimising investment portfolios through derivatives, and ensuring regulatory compliance. With our guidance, clients can navigate the complexities of derivatives and make informed decisions to maximise returns while effectively managing risks.

Derivatives Product Analysis

As consultants, FMCT will analyse and evaluates derivatives features, risks, and potential applications in the specific context of the client's organisation. This involves assessing and analysing various derivatives products available in the market, such as options, futures, swaps, and forwards.

Risk Management Strategies

As consultants, FMCT will provide guidance on implementing effective risk management strategies using derivatives. They assess the client's risk exposure, develop risk mitigation plans, and recommend suitable derivative instruments to hedge against market volatility, interest rate fluctuations, currency risks, or other specific risks.

Portfolio Optimisation

As consultants, FMCT will help financial market organisations optimise their investment portfolios by incorporating derivatives. They analyse the client's investment goals, risk tolerance, and market outlook to identify opportunities for enhancing returns or managing downside risk through the strategic use of derivatives.

Regulatory Compliance

As consultants, FMCT will ensure that financial market organisations comply with applicable regulations and guidelines governing derivatives trading and risk management. They help clients understand regulatory requirements, establish robust internal controls, and develop compliance frameworks to meet regulatory standards.

FINANClAL MARKETS CONSULTING AND TRAINING (FMCT) CENTRE

DERIVATIVES

DERIVATIVE TYPES

DERIVATIVES TYPES EXPLAINED

Futures Contracts

Options Contracts

Swaps

Forward Contracts

ADDITIONAL NOTES ON DERIVATIVES

Interest Rate Derivatives

Currency Derivatives

Equity Derivatives

Commodity Derivatives

Credit Derivatives

Weather Derivatives

DERIVATIVES TRAINING

Derivatives Basics

Derivatives Pricing and Valuation

Derivatives Trading and Strategies

Derivatives Regulation and Risk Management

DERIVATIVES CONSULTING

Derivatives Product Analysis

Risk Management Strategies

Portfolio Optimisation

Regulatory Compliance

Financial Market Consulting Training (FMCT)

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DERIVATIVES

DERIVATIVE TYPES

DERIVATIVES TYPES EXPLAINED

​Futures Contracts

Options Contracts

Swaps

Forward Contracts

ADDITIONAL NOTES ON DERIVATIVES

Interest Rate Derivatives

Currency Derivatives

Equity Derivatives

Commodity Derivatives

Credit Derivatives

Weather Derivatives

DERIVATIVES TRAINING

Derivatives Basics

Derivatives Pricing and Valuation

Derivatives Trading and Strategies

Derivatives Regulation and Risk Management

DERIVATIVES CONSULTING

Derivatives Product Analysis

Risk Management Strategies

Portfolio Optimisation

Regulatory Compliance

Futures Contracts