Derivatives III - DrWaleKesh

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Options Strategies 11 Topics

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Lesson Content

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a. demonstrate how an asset’s returns may be replicated by using options

b. discuss the investment objective(s), structure, payoff, risk(s), value at expiration, profit, maximum profit, maximum loss, and breakeven underlying price at expiration of a covered call position

c. discuss the investment objective(s), structure, payoff, risk(s), value at expiration, profit, maximum profit, maximum loss, and breakeven underlying price at expiration of a protective put position

d. compare the delta of covered call and protective put positions with the position of being long an asset and short a forward on the underlying asset

e. compare the effect of buying a call on a short underlying position with the effect of selling a put on a short underlying position

f. discuss the investment objective(s), structure, payoffs, risk(s), value at expiration, profit, maximum profit, maximum loss and breakeven underlying price at expiration of the following option strategies: bull spread, bear spread, straddle and collar

g. describe uses of calendar spreads

h. discuss volatility skew and smile

i. identify and evaluate appropriate option strategies consistent with given investment objectives

j. demonstrate the use of options to achieve targeted equity risk exposures

Curriculum Questions

Swaps, Forwards and Futures Strategies 7 Topics

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Lesson Content

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a. demonstrate how interest rate swaps, forwards, and futures can be used to modify a portfolio’s risk and return

b. demonstrate how currency swaps, forwards, and futures can be used to modify a portfolio’s risk and return

c. demonstrate how equity swaps, forwards, and futures can be used to modify a portfolio’s risk and return

d. demonstrate the use of volatility derivatives and variance swaps

e. demonstrate the use of derivatives to achieve targeted equity and interest rate risk exposures

f. demonstrate the use of derivatives in asset allocation, rebalancing, and inferring market expectations

Curriculum Questions

Currency Management 10 Topics

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a. analyze the effects of currency movements on portfolio risk and return

b. discuss strategic choices in currency management

c. formulate an appropriate currency management program given financial market conditions and portfolio objectives and constraints

d. compare active currency trading strategies based on economic fundamentals, technical analysis, carry-trade, and volatility trading

e. describe how changes in factors underlying active trading strategies affect tactical trading decisions

f. describe how forward contracts and FX (foreign exchange) swaps are used to adjust hedge ratios

g. describe trading strategies used to reduce hedging costs and modify the risk–return characteristics of a foreign-currency portfolio

h. describe the use of cross-hedges, macro-hedges, and minimum variance-hedge ratios in portfolios exposed to multiple foreign currencies

i. discuss challenges for managing emerging market currency exposures

Curriculum Questions

About Instructor

Olawale Keshinro

27 Courses

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