FINANCIAL MARKET COURSES
Japanese Equity Market
Receivable Finance (New)
Lending - An Introduction
The Lending Cycle
Commodities - An Introduction (Revised)
Commodities - Trading (New)
Commodities - Livestock (New)
Commodities - Softs (New)
Primer – MiFID II/MiFIR (New)
Understanding Private Wealth Management Business
Private Wealth Management Products & Services
Primer – Smart Beta (New)
Available on iPad and Android tablets as well as desktop
Bond Hedging with Options
Bond investors expect to preserve their invested principal and simultaneously gain from periodic interest payments received from the bond issuer. Although investors are likely to receive their principal in full at maturity, the value of their position erodes if interest rates rise.
Fund managers use hedges to protect their bond portfolios against rising interest rates. Essentially, hedges are a type of insurance against an unfavorable outcome.
This course will look at some of the primary option-based bond hedging strategies and examine their features and characteristics in detail. The course will also discuss the design and implementation of these strategies.
On completion of this course, you will be able to:
• Identify the different option-based bond hedging strategies available to fixed income fund managers
• Design and implement a specific option-based bond hedging strategy
Topic 1: Introduction to Option-Based Bond Hedging Strategies
• Hedging Process
• Hedging Strategies
o Protective Put Buying Strategy
o Covered Call Writing Strategy
o Long Collar Strategy
Topic 2: Structuring Option-Based Bond Hedges
• Structuring & Implementing Hedging Strategies
o Structuring Process – Protective Put Buying Strategy
• Determining the Underlying Instrument
• Determining the Strike Price
• Calculating the Hedge Ratio
• Monitoring & Evaluating the Hedge
• Structuring Process- Covered Call Writing Strategy
o Covered Call Writing Strategy - Determining the Strike Price
o Covered Call Writing Strategy - Calculating the Hedge Ratio
ESTIMATED COMPLETED TIME
Bond Hedging with Swaps
This course focuses on the use of interest rate swaps to hedge bond portfolios. Swap contracts can change the cash flow characteristics of an asset, thereby reducing or eliminating the interest rate exposure for that particular asset. The course examines the use of par swap contracts as the underlying hedging instrument, the features and characteristics of such hedges, and demonstrates how to implement a swap-based hedging strategy.
Other Courses In:
Fixed Income Analysis
Bond Futures Basis
Bond Hedging with Swaps
Relative Value Trading - An Introduction
Relative Value Trading - Strategies & Risks
Intuition engages with over 30 accreditation bodies to ensure Know-How can be used for CPE credits. If your organization needs CPE from a body not listed below, contact us and we will endeavour to have them included.
© Copyright 2016 by Intuition. All Rights Reserved.