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

Description

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

Learn the benefits of using non-deliverable forwards and the intricacies of the NDF markets.

Learn the benefits of using non-deliverable forwards
Explore the NDF market and various product structures
Identify strategies to manage and hedge against foreign exchange exposure

Overview

Foreign Exchange Non-Deliverable Forwards Course Overview

Some nations choose to protect their currency by disallowing trading on the international foreign exchange market, typically to prevent exchange rate volatility. Market participants can use non-deliverable forwards (“NDFs”) to transact in these non-convertible currencies. In this course, we will discuss how traders may use NDFs to manage and hedge against foreign exchange exposure. We will also take a look at various product structures, such as par forwards and historic rate rollovers. Lastly, we will outline several ways to negate or cancel an existing forward position that is no longer needed.
Foreign Exchange – Non-Deliverable Forwards Learning Objectives

Explain non-deliverable forwards
Compare regular and irregular settlement and fixing dates
Identify NDF and DF risk limits and manage forward exposure
Calculate settlement payments, broken dates, risk limits, par forwards, and historic rate rollovers
Learn about the history of the Yen premium

Who Should Take This Course?

This course is designed for those who desire to work in or already work with FX trading, specifically in exotic markets where capital controls exist and it is not possible to construct a deliverable forward curve
What you’ll learn
Introduction

Introduction

Learning Objectives

Downloadable Materials
Non-Deliverable Forwards

Non-Deliverable Forwards Overview

NDF Structure

Settlement and Fixing Dates

Settlement Payment Calculation

Settlement Payment – Downloadable Files

NDF Price Determination

Onshore and Offshore Markets

Interactive Exercise 1

NDF Broken Dates Overview

NDF Broken Dates Example

NDF Broken Dates Downloadable Files

Setting Irregular Fixing and Settlement Dates

Setting Irregular Fixing and Settlement Dates Examples

Interactive Exercise 2

NDF and DF Risk Limits

NDF and DF Risk Limits Downloadable Files

Value at Risk

Interactive Exercise 3

Cross Product Limits

NDF Fixing Risk and TN Balances

Nostro Account Balancing

Risk Limiting Facilities

TriOptima

Interactive Exercise 4
Midway Check-in

Midway Check-In
More Complex Deliverable Forward Products

Par Forwards

Par Forwards Calculation

Historic Rate Rollovers

Historic Rate Rollover Calculation

Historic Rate Rollover Downloadable Files

Canceling a Forward Contract

Managing Forward Exposure Example

Trade Cancellation

Basis Risk
Case Study: The Yen Premium

Case Study The Yen Premium

Case Study The Yen Premium Continued

The Effects on the Forward Market

The Effects on the Forward Market Continued
Course Summary

Course Summary
This Course is Part of the Following Programs

Why stop here? Expand your skills and show your expertise with the professional, specializations.
All Capital Markets & Securities Analyst (CMSA)® Courses

Foreign Exchange – Non-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