INTRODUCTION TO TRADING AND INVESTING IN FIXED INCOME SIMULATION DEALING ROOM

Transcription

1 INTRODUCTION TO TRADING AND INVESTING IN FIXED INCOME SIMULATION DEALING ROOM Leading Excellence in Banking & Finance

2 OUR PARTNERS CapitalWave provides truly dynamic educational simulation training platforms. CapitalWave s instructors, consultants and management team have a wealth of financial knowledge and experience and have designed, developed and delivered training programmes globally to many of these leading capital market banks and financial institutions Amplify Trading was founded in 2009 and has three core operations of business: 1. Proprietary trading across all major asset classes 2. Professional development using trading technology for live & simulation-based training 3. Market analysis and research for clients Part of Henley Business School, the practical application of finance theory is one of the ICMA Centre s key advantages. This integration of theory with practice is achieved through the use of the Centre s three state-of-the-art dealing rooms. With over 100 terminals, All equipped by Thomson Reuters, the terminals run the latest industry simulation software as well as the Centre s own simulation software platforms; ICTrader and StockTrak. Amplify Trading delivers training to the world s leading global banks using its proprietary trading and simulation platforms. The BIBF Dealing Room has a Live link to Amplify Trading s dealing room in London. Participants will be exposed to the Live trading activity of Amplify s trading team. The CISI is the largest and most widely respected professional body for those who work in the securities and investment industry in the UK and in a growing number of major financial centres around the world. Formed in 1992 by London Stock Exchange practitioners, we now have more than 40,000 members in 110 countries. Thomson Reuters is the world s leading source of intelligent information for businesses and professionals, combining industry expertise with innovative technology to deliver critical information to leading decision makers in the financial and risk, legal, tax and accounting, intellectual property and science and media markets. SimArch was founded in 1999 and has developed simulations related to commercial banking businesses. The simulations model all key components of a commercial bank and its operating and regulatory environment. SimArch has conducted over 450 workshops in more than 40 countries. SELECTIVE CLIENTS OF BIBF S PARTNERS

3 The BIBF Dealing Room is a state of the art facility, the first of its kind in the MENA region, which powers technologyenabled learning by doing. The facility has over 20 trading stations, fully-equipped multimedia and market tools such as Bloomberg and Thomson Reuters Eikon. In order to provide cutting-edge training expertise and technology, BIBF has partnered with specialist training and technology providers in the UK and US. Our partners have a successful track record of providing training to bulgebracket global banks, including JPMorgan, Citigroup, HSBC, Morgan Stanley, Barclays Capital & Deutsche Bank. A comprehensive range of courses are offered, covering subjects of interest to professionals in the financial sector across Treasury, Investments, Capital Markets and Risk Management.

4 SIMULATION TRAINING IN PORTFOLIO AND INVESTMENT DEALING ROOM

5 INTRODUCTION TO TRADING AND INVESTING IN FIXED INCOME This 4-day intensive course is designed to provide delegates with a high level understanding of interest rate markets and the associated derivative markets. By participating in this 4-day intensive course, delegates gain a deeper understanding of the global Fixed Income Markets. MAIN TOPICS COVERED IN THIS PROGRAMME Be aware of the key information that moves market prices and what information and data participants need Understand the key terminology, phrases and acronyms used in the money market, fixed income market and credit market Become familiar with the major products traded, how they are used and the trade strategies market participants employ WHAT YOU WILL LEARN Will have a clear understanding of the key cash and derivative products traded in the money market. Will appreciate the structure and pricing of the major cash and derivative products traded in the fixed income markets. Be able to identify the different types of risk management and trading analysis undertaken by market participants and understand their data needs. To describe the key data inputs used by option traders to price options and manage the risks on their positions. Understand the terminology used in the credit trading market and be able to identify the types of trades that are established, together with the information needed to assess them. PREREQUISITE COURSES Those interested in attending this course should have a foundational understanding of Fixed Income Markets. There are no pre-requisite courses. WHO SHOULD ATTEND From Commercial Banks, Central Banks, Investment Banks, Asset Management firms representatives, Pension Funds, Hedge Funds, Leasing companies, Insurance companies, Fund Managers, other financial institutions Fixed Income Traders Those who support Fixed Income Traders Financial Officers Risk Officers Internal Auditors Investment Analyst Portfolio Manager COURSE ACTIVITIES REAL MARKET NEWS TRADING GAME (RNTS) Each day begins with a class discussion of the current news stories; this reinforces the need for delegates to become news aware. Delegates are then broken into small groups that need to take trading positions within stated position limits across 6 markets using real market prices. The positions are marked-to-market and groups are able to change their positions during each analysis session. A leader-board ranks the team s performances and the winning team is one with the highest profit at the end of the programme. TRADING SIMULATIONS (FITS) Delegates take part in trading simulations using the Fixed Income Trading Simulator (FITS). These fast paced market simulations allow delegates to experience the high pressure of trading and volatile markets in a tightly controlled environment. Each delegate needs to manage their own positions, make prices, and react to market news while trying to make money in an exciting and competitive forex environment. For some participants this is often their first exposure to trading, and delegates find the experience highly engaging and enjoyable. ONLINE LEARNING TOOL (OSA) Delegates take part in using the Option Strategy Analyser (OSA). This online tool will provide delegates the opportunity to create and structure Options for a better understanding of how to use them in the Fixed Income marketplace.

6 COURSE OUTLINE DAY 1: THE MONEY MARKETS Module 1: Review of the Money Markets The role of the money market Key money market products LIBOR and Overnight Index Swaps Central Bank liquidity facilities The implications of the current low rate environment Pricing money market securities 7 Real News Trading Game Module 2: Introduction to Futures Background to futures markets Definitions and terminology Pit versus screen trading Clearing and margining Physical delivery versus cash settlement 7Excel Case Study Module 3: Yield Curves and Forward Rates Definition of the yield curve Yield curve shapes How traders use the yield curve Calculating implied forward rates Forward Rate Agreements Hedging using FRA s Understanding why traders focus on forward rates 7Understanding the Yield Curve 7Fixed Income Trading Simulator Module 3: STIR Futures Review Background to futures markets Definitions, terminology and features Understanding STIR futures STIR futures terminology Packs, bundles and strips STIR futures trading strategies Hedging using STIR futures DAY 2: THE BOND AND SWAP MARKETS Module 1: Bond Market Maths and Repos Pricing interest bearing securities The relationship between price and yield Day count conventions Accrued interest Introduction to duration and convexity The Repo Market 7Real News Trading Game Module 2: Interest Rate Swaps Basic principles of how swaps work Cash flows, timing and basic structure Market quotation conventions Interest rate swap applications The link between swaps and corporate bond issuance 7Excel Case Study Module 3: Fixed Income Products and Markets Overview of government and corporate bonds The US treasury market Government bond auction process Strips and agency securities The corporate bond issuance process Bond Ratings Bond futures, conversion factors and CTD 7Fixed Income Trading Simulator Module 4: Other Types of Swaps Non constant principal swaps Overnight Index Swaps (OIS) Cross currency swaps Swaps spreads, curve trades and what traders watch

7 DAY 3: US BONDS AND EMERGING MARKETS Module 1: More on the US Bond Markets US Bond Market Overview Municipal Bonds Agency Securities Mortgage Backed Securities The securitisation process Prepayment Risk and MBS Terminology The TBA market and MBS Dollar Roll 7Real News Trading Game Module 2: Emerging Markets LATAM Focus Background and history Emerging market crisis The Brady plan and Brady bonds Motivations to invest in and trade emerging market debt Emerging market benchmarks and Indexes Sovereign debt crisis contagion 7Fixed Income Trading Simulator Module 3: Emerging Markets Eastern Europe and Asia Overview Comparisons of key markets Major products traded in emerging markets The carry trade Macro drivers and key news releases Greece and its knock-on effects Module 4: Introduction to Options Option definitions and terminology American versus European style options Intrinsic and time value Key factors that influence option prices Using options to hedge risk Option trading strategies 7Excel work sheet 7Option Strategy Analyser DAY 4: TRADING CREDIT Module 1: Options Knowledge Primer Understanding the option Greeks Key interest rate option products Caps, collars, floors and swaptions Exotic option overview Understanding barrier options 7Option Strategy Analyser Module 2: Overview of Credit Derivatives The principles of credit derivatives Key terms and definitions Motivations for using credit derivatives Overview and current trends in credit derivative usage Types of credit derivatives 7Excel Case-study Module 3: Single Name and Index Credit Default Swaps (CDS) Terms and definitions What are credit events? The credit derivative settlement process The Big Bang, Little Bang and SNAC The CDX and itraxx index series How index products work 7Excel Case-study Module 4: Trading Credit Overview and concept Relative value versus outright trading The link between corporate bonds and CDS Single name versus index CDS What information does a credit trader need? The sovereign debt crisis

8 BIBF plays a vital role in the training and development of human capital in the Kingdom of Bahrain. Our commitment to excellence has strengthened our position as the top provider of quality education across all major business disciplines. We serve as a partner to numerous world-class institutions; delivering thought leadership, research and advisory, assessment and training solutions in the areas of Accounting and Finance, Academics, Executive development, Banking, Leadership and Management, Insurance, Islamic Finance and Information Technology; resulting in a complete business solution. BIBF covers a wide spectrum of subject matter, with over 300 different courses offered to the financial and corporate market; tailor-made training solutions based on organisational requirements; specialised programmes taught by leading market specialists; and professional qualifications and degree programmes in partnership with major international organisations. BIBF continues to exceed global benchmarks for many of the qualifications it offers with its affiliates. Contact Details: Tel: dealing@bibf.com