Course Objective:
To provide participants with a first-hand experience of financial market trading.
Having gained an insight into trading in financial markets you will be able to:
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Understand trading jargon
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Understand what drives financial markets and why
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Be able to make better informed investment decisions
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Be able to offer prospeective employers a record of your skills in the financial markets
This course will benefit:
Students and others that wish to follow a career in the financial markets
Course length: Five days.
Course content:
Lecture 1 - Introduction to the financial markets
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Equity Markets
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FX Markets
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Interest Rate Markets
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Commodity Markets
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Credit Markets
Simulation One – Vodafone Shares
In this simulation participants will trade Vodafone shares as prop traders to understand the structure of quotations and how to execute a trade and manage a position within pre-agreed limits. The delegates will also go through an end of day procedure to understand the process of marking-to-market and financing a position overnight.
There will be a debrief of the trading session and the tutor will explain what the delegates did well and how they could improve their performance.
Lecture 2 – Fundamental and Technical Trading
There are two types of traders:
Fundamental Traders analyze the “fundamentals” such as macro-economic environment, economic growth, monetary and fiscal policies etc. and take trading views based on the “fundamentals”
Technical Traders assume that all knowledge is contained in the price charts for the data and thus base their trading positions on charts
This section will provide a short lecture on both types of trading and how they work followed by a simulation that is based on each of the trading styles
Simulation Two – Fundamental Trading of Interest Rates (Gilts)
In this simulation participants will trade UK Government Gilts from the stance of a fundamental trader. During this simulation they will be given information on UK Monetary Policy, QE, economic growth predictions and inflationary expectations and will be required to trade a portfolio of UK Gilts. There will be a debrief of the trading session and the tutor will explain what the delegates did well and how they could improve their performance.
Simulation Three – Technical Trading of F/X (GBP/USD spot trading)
In this simulation participant will trade spot GBP/USD from a technical perspective. Delegates will learn about support and resistance points, moving averages, candle sticks, head and shoulders amongst other frequently used technical analysis methods.
Lecture 3 – Sales Traders
Sales Traders do not trade the banks capital they act as facilitators for customers and execute trades in the markets on behalf of customers. This section will explain to the delegates how the sales traders operate.
Simulation Four – Credit Market Trading of Asset Swaps
In this simulation participants take the role of sales trader in the credit markets and will execute trades in Asset Swaps (Floating Rate Corporate Securities) on behalf of fund managers. In this simulation delegates will understand how “flow” business works and is different from proprietary trading and position taking.
Lecture 4 – Derivatives Trading (Interest Rate Swaps)
Most position trading is done using derivatives. In this section delegates will get their first introduction into Delta 1 derivates by learning about interest rate swaps.
Simulation Five – Interest Rate Swaps
In this simulation participants will use the information that they have learned to trade interest rate swaps on behalf of the institution. They will be given a mix of fundamental and technical data and be required to make money for their bank and facilitate customers at the same time.
Lecture 5 – Option Trading
In this section delegates will be introduced to option trading. They will learn the fundamentals of calls and puts and how option prices respond to underlying asset prices, market volatility and the passage of time. Option trading is much less frenetic and more analytical than most other types of trading and delegates will be shown some simple option strategies such as call and put spreads and straddles. Delegates will learn how to use position management techniques using Delta, Vega and Theta.
Simulation Six – Crude Oil Options Trading
In this simulation participants will be takers of prices and will not be expected to make markets to other participants. The will be given information about economic and political events and some technical data and will be asked to take a position in the oil market using a combination of crude oil futures and options. They will then trade the position for changes in crude oil prices, crude oil market volatility and the passage of time.
Copyright Robin Brown |