HEDGING & TRADING IN FOREIGN EXCHANGE

Overview

This course is applicable to all levels of the corporate infrastructure. Individuals in every area of responsibility in all industries whose decisions have significant FX exposures will benefit from this program. Managers from areas such as treasury, internal audit, accounting, trading and risk management will find the course highly beneficial. Some of the more specific areas include:

  • FX traders and hedgers.
  • Banks: Money center banks, commercial banks and investment banks.
  • Brokerage Firms: FCMs, Retail Dealing Desks
  • Auditors: External Auditors supporting corporations with FX exposures, banks and hedge funds.
  • Corporate Hedgers: Treasurers, Commercial Hedging Desks, Mid-Office personnel, Internal Auditors, Back Office.

What You Will Learn

  • The history of FX markets
  • What moves foreign exchange rates
  • The role of Central Banks in FX markets
  • How interest rates impact FX and the importance of the carry trade
  • How technical analysis helps in FX trades
  • How to implement passive and active hedge strategies
  • How to hedge “risk on” asset class exposures (e.g., equities, etc.,) with FX (USDJPY, CADJPY, AUDJPY)
  • How to hedge out FX exposures in commodities (USD for Crude Oil, BRL for Sugar, GBP for Cocoa, etc.,)
  • Pros & cons of common FX trading and hedging instruments (Spot, Outright Forwards, Non-Deliverable Forwards, FX Swaps, OTC Currency Options and Exchange-traded currencies)
  • How to execute trades in 24-hour FX markets
  • The role of money center banks; ECNs vs. dealing desks; Liquidity risk
  • Options Pricing Models for OTC Currency Options: Black-Scholes, Cox-Ross-Rubenstein; Monte Carlo
  • Common OTC Currency Option Strategies & when to use them (e.g., long call, long put, short call, short put, synthetic futures, vertical debit spreads, volatility spreads, etc.,).
  • Using the greeks to understand the nuances of various OTC Currency Option strategies.
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