Derivatives as Hedging Tool in Securities Trading

Product & Service

12
Aug 2020

12 August 2020

8:30 am - 5:00 pm

Securities Commission Malaysia

MYR 950 *Fee is not inclusive of 6% SST

Derivatives is used to mitigate the risk of economic losses arising from changes in the value of the underlyings. Following the recent death of Libor (benchmark that reflects the cost of borrowing among banks), big investment banks were fined billions of dollars for trying to rig it. Hence, hedging is necessary, done by taking a position in the futures market that is opposite to the one in the physical market with the objective of reducing or limiting risks. Speculation normally involves making a profit from a security’s price change, whereas hedging attempts to reduce the amount of risk, or volatility, associated with a security’s price change. Hedging risky transactions can help you avoid heavy losses in financial markets. Therefore, derivative instruments are very valuable serving as hedging tools in securities trading as well as in implementing risk-management strategies.

The programme will provide insights into derivatives market categories, including interest rates, commodities, and currencies as well as the recent issues, potentials and its challenges.

Programme Objective
This programme aims to provide participants with comprehensive understanding of how derivatives could be applied as a hedging tool in trading in securities market.

Learning Outcomes

By the end of this programme, participants will be able to:

  • explain the features, classes and participants of derivatives market
  • describe the risks and key considerations in applying derivatives as a hedging tool
  • explain the hedging strategies using derivatives instruments
  • discuss the risk management failure, its challenges and new potentials

Competencies

Derivatives Dealing (Level 3)
Foundational (Regulatory) – Capital Markets Regulations (Level 3)
Foundational (Products) – Capital Market Products (Level 3)

Target Audience

Individual 

Capital Markets Services Representative’s License Holders, Directors, Company Secretaries, Partners of Firms, C-Suites, Lawyers, Accountants, Corporate Consultants, Professional Traders, Local Participants in Derivatives Market, Professionals undertaking corporate advisory work, Financial Controllers, Head of Compliance, Head of Legal, Integrity Officers, Risk Officers, Sustainability Officers, Internal Auditors

Institutions 

Public Listed Companies (PLCs), Legal Firms, Consultancy Firms, Accounting Firms, Fund Management Companies, Stockbroking Firms, Investment Banks

8.30 am Registration
9.00 am Derivatives Refreshed

  • Descriptions & features of derivatives
  • Market and classes of derivatives
  • Participants and end-users of the market
10.15 am Coffee Break
10.45 am Derivatives Risks

  • Main categories of risks
  • Dealers dilemma of sell-side swap
  • Key considerations associated with applying derivatives
  • Managing market risks in a portfolio of derivatives
12.30 pm Lunch Break
2.00 pm  

Hedging, Speculating and Arbitraging

  • Hedging using key derivatives products
  • Hedging strategies
  • Regulatory practices in derivatives markets
3.45 pm Coffee Break
3.45 pm Market Cycles and Derivative Strategy

  • Derivatives risk management failure
  • Major derivatives scandal
  • Building and enhancing a strong and robust hedging strategy
  • Digital assets as a new form of derivatives instruments
5.00 pm End of Programme

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