The seminar examines and compares futures and forward contracts. Usage of these contracts for hedging and speculation is discussed. Examples of currency, commodity, bonds and interest-rate contracts are used to explain the concept and its applications. Mark-to-market, quotation, settlements and other specifications are described here as well. The principles of forward valuation are next applied to swap contracts, which may be considered to be bundles of forward contracts.

 

At the end of Intrinsic Value's training seminar in futures and forwards the participant should be able to:

􀂅  Compare and Contrast forward and futures contracts.

􀂅  Discuss some uses of stock index futures.

􀂅  Define index point and value of an index point.

􀂅  Describe index arbitrage and program trading.

􀂅  Calculate  a  minimum variance hedge ratio for a portfolio of stocks, using

     futures, given beta.

􀂅  Describe some risks in index hedging.

􀂅  Discuss “tailing the hedge”.

􀂅  Compare and contrast currency forwards and futures contracts.

􀂅  Define covered interest parity.

􀂅  Calculate a forward exchange rate.

􀂅  Calculate a hedge ratio using foreign exchange futures.

􀂅  Discuss the relative basis risks with commodity futures.

􀂅  Define forward rate agreement (FRA).

􀂅  Discuss FRAs, their nomenclature, uses and settlement.

􀂅  Calculate T-bill and Eurodollar futures prices.

􀂅  Construct a hedge using Eurodollar or T-bill futures.

􀂅  Define the tick value of a Eurodollar or T-bill futures contract.

􀂅  Define cheapest-to-deliver and conversion factor.

􀂅  Compare and contrast T-Bond and Gilt futures contracts.

􀂅  Define the tick value of a T-Bond and Gilt futures contract.

􀂅  Construct a hedge using T-bond futures.

􀂅  Compare and contrast stack and strip hedges