This course is designed to introduce the participant to the swaps markets, including interest rate swaps, currency swaps and equity swaps. The course begins by outlining the key features and characteristics in generic swap contracts. An overview of the risks associated with swaps, including credit risk and market risk, are explored. This is followed by an explanation of how interest rates swaps are used in asset liability management, specifically, transforming a fixed rate liability or asset into a floating rate liability or asset. The structural differences between currency and foreign exchange swaps are covered and how currency swaps are used to manage currency risk is explored. Equity index swaps are outlined and how portfolio managers use them is examined. The course finishes with a review of other types of swaps, including asset swaps, forward swaps, constant maturity swaps, amortizing and accreting swaps, and roller coaster swaps. Key elements of the International Swap and Derivatives Association (ISDA) documentation will also be discussed.

Objectives

By the end of the course, the participant will be able to:

• Outline the key elements in generic swap contracts
• Identify the risks associated with swaps, specifically, credit and market risk
• Explain how interest rate swaps are used by asset liability managers to manage risk
• Identify the difference between currency and fx swaps
• Explain how currency swaps are used to manage currency exposure
• Explain the mechanics of equity index swaps and how they are used
• Identify and explain other types of swaps, including asset swaps, forward swaps, constant maturity swaps, roller coaster swaps and amortizing swaps
• Identify Bloomberg pages that market practitioners use

This course is designed for

• People joining a swap desk
• Equity and fixed income cash traders and salespersons with no swap experience
• Trader support people, risk managers and operations managers with little or no swap knowledge