Why these workshops?

People at all levels in business need a basic understanding of how economic indicators such as the exchange rate, inflation rate, repo rate, balance of payments, stock market indices, and commodity prices impact on business in the South African economy. These elementary workshops will focus on giving learners a working knowledge of basic finance and financial markets. Fundamental understanding of economic indicators, instruments traded in the financial markets as well as the accounting functions within a business is dealt with effectively. These workshops will be practical in addressing these topics for people who operate in business units outside of the financial and accounting area of their business.

Course Outline

Introduction to Derivatives

  • Definition and development of derivatives
  • An overview of the derivative markets in South Africa
  • Why use derivatives? – Understanding the risks and rewards of using derivatives
  • Successes and failures in the derivative markets

The Forward and Futures Market

  • Introduction – forward contracts vs futures contracts
  • Pricing forwards and futures

Application of forward and futures contracts

  • Hedging
  • Speculating
  • Arbitrage

Exchange traded futures

  • Equity Index futures and Individual equity futures
  • Agricultural futures
  • Margining
  • The risks and benefits of trading futures

The Options Market

  • Introduction – basic option terminology
  • Calls and puts
  • American and European option characteristics
  • Option payoffs
  • Exchange traded and over the counter options
  • Option valuation – determinants of option premium
  • The terminology of volatility
  • Delta and hedging delta
  • Option sensitivities
  • Risks and hedging techniques in the option market

Outcomes

On completion of the program the delegate will be able to:

  • Understand the terminology of the derivatives market
  • Construct expiry profiles of different future and option structures
  • Apply forward and futures for heding price exposure
  • Understand the nature of the exchanged traded futures market in SA
  • Distinguish between call and put options
  • Identify the effect of the option “Greek’s” on the option value
  • Apply options in hedging risks in the different markets