Introduction to Derivatives

Course Overview

Derivatives now play a significant role in the investment portfolio, whether they are used as a key risk management tool or provide liquid alternatives to gain market exposures. Understanding how derivatives work, what markets they are relevant to and possessing a comprehension of the concepts behind derivatives is of fundamental importance in the new age of the investment industry.

Too many within the industry consider derivatives as complicated, if only because they view the jargon as alien. This half-day course aims to demystify the terminology used in the marketplace and promote an awareness of the concepts behind derivatives. It also provides an understanding of the different types of instruments and how investment managers use them to assist in achieving the risk and return objectives for client portfolios.

Learning Objectives

• Provide a clear understanding of the terminology and the concepts behind derivatives.
• Cover the fundamental knowledge you need to know about derivatives.
• Understand why derivatives are used as well as or in place of cash assets.
• Be aware of how derivatives are used by investment managers and illustrate simple portfolio examples of how they are used in the portfolio.
• Recognise the difference between Exchange Trade and Over-The-Counter (OTC) products.
• Offer an insight into the different derivative instruments used such as futures, swaps and options and the potential risks involved.