MTA Master Trader Academy

Corporate Finance Institute – 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

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.
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 In Foreign Exchange – Non-Deliverable Forwards?

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