Hedging Techniques in the Capital Markets

Hedging strategies are executed by various business functions including trading desks, asset managers, liability managers and treasuries as well as across asset classes. This course explores hedging techniques and the various aspects that need to be considered — such as using cash versus derivatives — and the effectiveness of the hedge, among other things. The main focus will be from a trading desk’s point of view, but client’s positions will also be explored.

Course Objectives

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

• Identify the specific risks and exposures to be hedged
• Assess the cash flows arising from both the target security and hedging instrument
• Discuss hedge effectiveness
• Analyze delta hedging
• Compare and contrast hedging a single security versus a portfolio

Suggested Prerequisites:

• Derivatives or equivalent knowledge

Program Level: Intermediate

Advance Preparation: None

Computers and Financial Calculators: Calculators

Recommended CPE Credits: 7