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Equity Derivatives Foundations

This course will guide you in understanding the employment of option strategies which are used worldwide to not only minimize portfolio risk but also to maximize the returns on the investments.

31 Modules

Overview

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Equity derivatives are a class of financial instruments whose value is based on the evolution of the underlying cash securities (equities and stock indexes). Investors can use equity derivatives to achieve goals such as yield enhancement, portfolio diversification, and the creation of synthetic exposures.

The equity derivatives market is characterized by factors such as the sheer diversity of instruments, differences between underlying instruments, and geographic idiosyncrasies around the world. This course explains the basics of these derivatives and examines in detail some of the more popular structures. Valuation and pricing methods for these instruments are also covered.

The equity derivatives market is huge – at the end of June 2012, an estimated USD 6.3 trillion in notional amounts was outstanding in the OTC equity derivatives market. This made it the third-largest OTC derivatives market (after interest rate and currency derivatives).

Products traded in the equity derivatives market range from basic instruments such as options and warrants to more complex structures such as equity swaps and contingent convertibles (CoCos).

Basics of Contracts for Difference (CFDs).
Contracts for Difference (CFDs) – Trading.
Equity Index Futures – Basics and uses.
Convertible Bonds.
Contingent Convertibles (CoCos).
Equity Swaps – Basics & Application.
Warrants.
Traditional Warrants – Benefits and Drawbacks.
Covered Warrants.
Warrants and Other Derivatives.
Warrant Valuation: Factors Affecting Warrant Prices Warrant Valuation: Intrinsic Value and Time Value.
Warrant Valuation: Pricing Traditional and Covered Warrants Warrant Price Sensitivities: Delta and Gamma.
Warrant Price Sensitivities: Theta, Vega, and Rho.
Equity Swaps.