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Financial Training Training

Financial Training

Introduction to Foreign Exchange

Duration
2 day

The aim of this course is to provide participants with the skills and techniques necessary to understand, analyse, measure and assess a variety of Foreign Exchange and FX Option Products.

Course Agenda

DAY 1

Foreign Exchange

Session 1


The Spot Foreign Exchange Market

  • Foreign exchange and impact of the Euro
  • Economic factors that can influence foreign exchange
  • Spot quoting and the Euro
  • Inverse quoting and market practice

Case Study: Participants will complete some spot foreign exchange exercises.

Session 2

Forward Foreign Exchange

  • Confirm understanding of derivation of the forward rate
  • FX forward point formula
  • The classic form of the FX swap
  • All in structures for client and bank

Case Study: Participants will create an FX swap for a corporate institution and consider the difference between dealing an “all in” deal and traditional swap.

Session 3

Case Study: Identify a local mid-sized corporate who is an active FX participant and review the effectiveness of its hedging strategy.

Session 4

Basic Trading game

Session 5

FX Options

  • Profit and loss (expiry) profiles
  • Put/call parity
  • The building blocks of options
  • Risk and sensitivity ratios
  • Delta, Gamma, Theta, Vega
  • Risk management with options

Case Study: Participants will create and use an FX option.

DAY 2

FX and Currency Derivatives

Session 1


Non-deliverable forwards

  • Definitions and market conventions
  • Product structure – what the NDF represents
  • Deriving the price
  • Uses and applications
  • Contractual and settlement issues

Case Study: Participants will use an NDF and determine arbitrage opportunities.

Session 2

Exchange traded FX derivatives

  • Defining the Derivative
  • FX Derivatives available
  • FX futures
  • Contracts and margining systems
  • How the products work
  • Benefits and risks in using derivatives

Case Study: Participants will use Futures to hedge a corporate institution and compare the result with an OTC hedge.

Session 3

Overview of most popular FX Option structures

How to construct and when to use:

  • Straddles, Risk Reversals, Strangles, Butterflies
  • Ratio spreads
  • Calendar spreads
  • Enhanced Forward
  • Knock Out Forward
  • Knock In Forward

Case Study: Look at a variety of structures – how have these been used effectively by mid-sized corporates.


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  • In-house Training

Run this course in house and tailored to your requirements.

Call +44 (0) 500 734 734 or enquire online.

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