Hedging & Trading in Foreign Exchange Markets

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Get a comprehensive understanding of the various trading and hedging strategies employed in the world of foreign exchange.

At A Glance

Industry Segment N/A
Course Level Introductory to Intermediate
CPE Credits 14
DTN Credits 6
Competency Path Certified Energy Trading Professional, Trading & Risk Management

What You Will Learn

  • The history of FX trading and the role of Central Banks in FX markets, including how interest rates impact FX trades and the importance of the carry trade.
  • How technical analysis helps in trading FX.
  • How to hedge “risk on” asset class exposures (e.g. equities, commodities, etc.,) with FX and how to hedge out currency exposures in specific commodities such as sugar, cocoa and crude oil.
  • Understanding the role of the money center banks; pros and cons of executing trades through an ECN vs. a dealing desk; Liquidity risk and how to trade large volumes in the 24-hour FX market.
  • How to price OTC Currency Options – Options Pricing models (Black-Scholes, Cox-Ross-Rubenstein; Monte Carlo).
  • Common OTC currency option trades (e.g. long calls, long puts, short calls, short puts, straddles and strangles) and when to use them.
  • Understanding volatility and correlations in an FX portfolio.

Who Should Attend

The course is applicable to all levels of the corporate infrastructure. Individuals in every functional area of responsibility in all industries whose decisions have significant FX exposures will benefit from this program. Managers from areas such as treasury, internal audit, accounting and trading and risk management will find the course highly beneficial. Some of the more specific areas follow:

  • FX traders and hedgers.
  • Banks: Money center banks, commercial banks and investment banks.
  • Brokerage Firms: FCMs, retail dealing desks.
  • Auditors: External auditors supporting corporations with FX exposures, banks
    and hedge funds.
  • Corporate Hedgers: Treasurers, hedge desks, mid-office personnel, internal auditors, back office.