Guy O’Loughnane – CFI Education – Foreign Exchange – Deliverable Forwards

Description

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Guy O’Loughnane – CFI Education – Foreign Exchange – Deliverable Forwards
Foreign Exchange – Deliverable Forwards

Become an expert on Foreign Exchange forwards using real-world scenarios which highlight the advantage of this Capital Markets product in hedging and trading.

Learn all about how market professionals talk about and trade FX forwards
Understand the math behind calculating forward FX prices and cross-rates
Explore how to manage a nostro account and interest rate exposure using FX forwards

Overview

Foreign Exchange – Deliverable Forwards Overview

This course titled Foreign Exchange – Deliverable Forwards covers a wide range of important topics, teaching you how to use deliverable forwards effectively. First, you will learn the benefits and drawbacks of these tools and understand how forward points work. We will explore forward FX prices, forward cross rates and forward FX broken dates. You will also learn strategies to deal with interest exposure, as well as how to manage a nostro account. After this course, you will have a more comprehensive understanding of how to use deliverable forwards to your advantage.
Foreign Exchange – Deliverable Forwards Learning Objectives

Explain the financial benefits of using FX deliverable forwards
Identify the differences between a spot, a forward, and a forward outright
Gain familiarity with forward foreign exchange terminology and understand its limitations
Calculate forward FX prices, forward cross rates, and forward FX broken dates
Use forward FX trades to manage a nostro account and interest rate exposure

Who Should Take This Course?

This Foreign Exchange – Deliverable Forwards course is great for anyone considering hedging currency risk exposure. Anyone interested in a career involving forwards or currency trading can benefit by understanding the key ideas discussed in this course.
What you’ll learn

Introduction

Course Introduction

Downloadable Material
Deliverable Forwards

Deliverable Forwards Overview

Deliverable Forwards Transaction

Forward Outrights

Why Use Foreign Exchange Forwards?

Calculating Forward Points

Forward Point Calculation Example

Forward Point Calculation – Exercise

Variable Exchange Rate (Fixed Interest Rates)

Fixed Exchange Rate (Narrower Interest Rate Differential)

Fixed Exchange Rate (Wider Interest Rate Differential)

Fixed Exchange Rate and Interest Rate Differential (Lower Nominal Rates)

Fixed Exchange Rate (Base Currency Rate Higher Than Counter Currency)

Forward Points Table

Calculating Sub 1-Year Forward Points – Example

Sub 1-Year Forward Point Calculation – Exercise
Forwards in Action

Nostro Account

Market Time Periods

Bank’s Nostro Account

Unbalanced Nostro Accounts

Salami Slicing

Deliverable Forward Confirmation Ticket

Fixed Counter Currency Amounts

Unequal Notional Amounts

Market Time Period Questions

Interactive Exercise 1
Midway Check-In

Midway Check-In
Tailored Dates

Tailored Dates and Forward Curves

The Refined Curve

Short-Term Interest Rates

Interest Rate Changes

Event Dates and Kinks in the Curve

Kinked Curve Calculation

Kinked Curves in an Uncertain World

Price Movements

Tailored Dates

Interactive Exercise 2
Market Application

Forward Quotes

Quoting Around Par

Reading a Forward Curve

Managing Forward Exposure

Forward Forwards: How to Calculate

CME IMM FWD-FWDs and Rolls

Calculating a Forward Cross Rate

Interactive Exercise 3
Conclusion

Conclusion
Qualified Assessment

Qualified Assessment

This Course is Part of the Following Programs
All Capital Markets & Securities Analyst (CMSA)® Courses

Foreign Exchange – Deliverable Forwards is part of the Capital Markets & Securities Analyst (CMSA)®, which includes 41 courses.

Skills Learned

Trading strategies used in the finance and capital markets
Career Prep

Work in capital markets, whether on the buy-side or the sell-side