Advanced Exotic Derivatives Trading Strategies & Valuation

In this article, we will give a brief outline of the various Advanced Exotic Derivatives Trading Strategies & Valuation Techniques and topics to be covered in the Advanced Exotic Derivatives Trading Strategies & Valuation. The biggest problem with this kind of valution or trading business is that the assets we are dealing with are not known to anyone. All people end up doing is making bets in the market, that too on things which are unknown to them. The Advanced Exotic Derivatives are the ones which led to the downfall of many big banks in the recent times. Hence, it is very very important for anyone to understand and learn the Advanced Exotic Derivatives Trading Strategies & Valuation strategies. Although a full detailed course spanning over a year is required for anyone to become a master of Exotic Derivatives or Advanced Derivatives, but this article will provide the essential details about which all topics one should be looking for while attending a Course on Advanced Exotic Derivatives Trading Strategies & Valuation Techniques.
Let's begin with the basics for the Advanced Exotic Derivatives Trading Strategies & Valuation:

Introduction to Advanced Exotic Derivatives Trading Strategies & Valuation

  -Using Derivatives Versus Trading the Underlying Asset/Commodity/Security: The main difference when you value or trade any particular security v/s its derivative

  -Arbitrage Pricing of Derivatives: The Arbitrage theory or the free money or free lunch trading strategy of derivatives

  -Derivative Pricing Models and usage of these models for Pricing, Trading Strategies & Valuation:

Futures and Forward Contracts and their Trading Strategies & Valuation:

  -Pricing/Valuation of Futures/Forwards and other derivatives

  -Futures/Forwards Valuation mechanism & Trading Strategies

Equity Options Trading Strategies & Valuation:

  -Pricing/Valuation of Options (Plain Vanilla and Exotics)

  -The Greeks and Option Price Sensitivity

  -Option Trading Strategies

Swaps Trading Strategies & Valuation:

  -Interest Rate Swaps

  -Pricing/Valuation and Trading Strategies for Other Types of Swaps

Credit Default Swaps (CDS) Trading Strategies & Valuation:

  -Pricing/Valuation of CDS

  -Trading/Risk Management Applications of CDS

Hedge Accounting Techniques: Derivatives & Hedge Accounting

In this article, we will give a brief outline of the various Hedge Accounting Techniques and topics to be covered in the Hedge Accounting Techniques. As the world has seen a big downfall recently and most of it is courtesy of the derivatives, it is very very important for a financial professional to be familiar with the Derivatives & Hedge Accounting Techniques. Although a full detailed course spanning over a year is required for anyone to become a master of Risk Management, but this article will provide the essential details about which all topics one should be looking for while attending a Course on Hedge Accounting Techniques.
Let's begin with the basics for the Hedge Accounting:

Overview of Derivative Products and Structures: First, the beginning of the topic will be an intro to the various derivative products and how they fit into the accounting structure. The derivates covered fall into the segment of:

--  Interest Rate Derivatives and Hedging using IR Derivatives

--  Foreign Exchange Derivatives & Hedging

--  Commodity Derivatives and Hedging

--  Equity Derivatives and Hedging

--  Credit Derivatives and Hedging

Accounting for Derivatives Not in Hedge Relationships :
Though there may not be any hedging for certain financial transactions, traders or organizzations may still get into Derivative transactions. This module will cover those cases.

Hedge Accounting: Here the introduction to Hedging and the Hedge Accounting begins and covered under the following topics:

--  Brief Outline of Hedge Accounting under FAS 133 & IAS 39

--  Hedge Types: Here we talk about the Fair Value, the Cash Flow and Net Investment numbers and how to ascertain them

--  Performing Hedge Effectiveness: Measurement & Assessment of Hedging

--  Sample Journal Entries for each Hedge Type: A sample case and study

--  Other Comprehensive Income Accounting and Amortization of Balances


Fair Value Accounting: Getting to the right numbers in accounting for derivatives and hedging in the right way.

--  Measuring Fair Value

--  Credit Considerations

--  New Accounting Standards; SFAS 157, SFAS 159, and recent FRS: Intro to the newly introduced Accounting standard with respect to Derivatives and Hedge Accounting

Differences in International Standards; IAS 39 : The various differences in the international standard followed across the globe


Reporting and Disclosure:

--  Appearance on Financial Statements; Derivatives in Hedge Relationships

--  Footnote Disclosure Requirements

--  Effect of New SFAS 161 Guidance in 2009


Operational Challenges:

--  Marrying Accounting Policy with Operational Processes

--  Timing Constraints and Implementing New Strategies

--  Regression Analysis

Risk Management for Non Quantitative Finance Professionals

In this article, we will give a brief outline of the various Risk Management aspects and topics to be covered in the Risk Management for Non Quantitative Finance Professionals. Although a full detailed course spanning over a year is required for anyone to become a master of Risk Management, but this article will provide the essential details about which all topics one should be looking for while attending a Course on Risk Management. Although it may be for quant professionals, we will also detail it for non-quant prrofessionals, as all people working on the finance and investment business are not well versed with quantitative aspects of finance and investments.
Let's begin with the basics:
Topic No. 1: Background & Introduction to Risk Management: We start with an introduction and certain case studies leading to Risk Management.

  Review and Critique of Modern Portfolio Theory with regard to Risk Management

  Concepts of Probability and Statistics and their application to Risk Management
  

Topic No. 2: Value at Risk (VaR) Concepts and their application to Risk Management: What is VaR, why is it important, why is it useless and how it should be looked upon for Risk Management

  Portfolio Risk, Incremental and Marginal Risk

Topic No. 3: Advanced Value at Risk VaR for Risk Management: We talk about the quantitative methods like simulations and regressions

  Monte Carlo Simulation

  What is the Fat Tail and Black Swan?

  Weaknesses in VaR and how to address them
  

Topic No. 4: Regulatory Environment and needs for Risk Management:

  Basel II and Proposed Industry Regulation Requirements

  Disclosures and Measures, Sharpe Ratio calculations, etc.
  

Topic No. 5: Extreme Events that may shatter Risk Management Techniques: We always look at the AVERAGE or MEAN value and assume that it will be applicable. What we dont understand is that worst cases and extreme cases can shatter us in big way.

  Worst Case Scenarios analysis

  Back Testing and its usage in Risk Management

  Stress Testing for Risk Management models

  Extreme Value Theory (EVT)
  

Topic No. 6: Credit Risk and managing it with Risk Management: Here we introduce models which are specific to Credit Risk - something like the counterparty risk.

  Altman Z Score, Merton and Jarrow Models, Transition Models

  CDO - Collateralized Debt Obligations

  CDS - Credit Default Swaps

  Impact on Overall Markets

Topic No. 7: Multi Factor Models and their applications to Risk Management:

  Alternative Way to Identify and Manage Risk
  

Topic No. 8: Liquidity Risk and analysis within Risk Management:

  A case study about how Bear Stearns was let down because of liquidity risk
  

Topic No. 9: Operational Risk and its mitigation with Risk Management Techniques:

  Key Risk Indicators (KRI) and Control Self Assessments (CSA)

Derivative Instruments: Types of Derivative Instruments

In this article, we will discuss the Introduction to Derivative Instruments and Types of Derivative Instruments. Again, the list covered in this article may not be comprehensive, but should be sufficient for someone interested in learning about the Derivative Instruments and the types of Derivative Instruments. This article will give a complete overall picture of the various courses and contents of Derivative Instruments. We are covering Plain Vanilla Derivatives like Futures, Options as well as exotics like Swaps and Swaptions. Here is the link to Options Trading Tutorials

Introduction to Derivative Instruments:

Derivative terminology and definitions : The first level overview of Derivatives

General characteristics of derivatives: The features, pricing elements and what determines, define and differentiates a derivative intstrument from other financial instruments.

Derivatives compared to securities : This topic is conttinuation of the above topic

Risk management applications : USe of Derivatives for Risk Management


Futures and Forward Contracts :

Terminology and definitions : of Futures and Forward Contracts

Exchange traded (listed) versus over-the-counter (OTC) contracts : The various type in terms of trading Futures and Forward Contracts

Types of contracts (equity, currency, energy, etc.) : Based upon the udnerlying how the Futures and Forward Contracts are classified

Forward pricing basics : Introdcution to Futures and Forward Contracts Pricing Models

Trading and risk management applications : How to use Futures and Forward Contracts for Risk management

Options :

Terminology and definitions : of Options

Option contract characteristics : Features of Options Instruments

Buying calls and puts : Difference between Put and Call Options

Writing (selling) calls and puts : Short Selling of Put and Call Options

Combination trading strategies : Various financial structures to be created using Options

Option pricing basics : The Black Scholes Model for pricing the Options


Swaps :

Terminology and definitions of Swaps

Swap contract characteristics

Interest rate swap contract cash flows and risks

Other types of swaps- equity, currency, commodity and credit/default

Risk management applications and use of Swaps for Risk Management

E-Clerx Freshers Walk-in at Pune (0-2 years)

E-Clerx, which is known to be one of the first KPO's or Knowledge processing outsourcing companies of India, is arranging a walk-in interview session this week. They have a pretty big staff strength of more than 2500 people based in Pune & Mumbai and are willing to add to this group in the domain of Capital Market and E-Commerce.

There are 2 ways one can apply for the job at E-Clerx:

Walk-in Interview for E-Clerx:

Date: Monday to Friday, this week i.e. 11th to 15th January 2010
Time: 10 AM to 5 PM
Address of Walk-in interview: DLF Akruti IT Park, 5th Floor, Block 1, Rajiv Gandi InfoTech IT Park, Hinjewadi, Phase II, Pune

An alternate venue in city limits is:
Place: Gordon House Hotel, E-Square, University Road, ShivajiNagar, Pune
Date: 13th and 14th January 2010
Time: 10 AM to 5 PM

Please note that walk-in at Gordon House Hotel are only on 13th and 14th Jan, while those at Hinjewadi at throughout this week.

Eligibility Criteria:

As mentioned in the ad by E-Clerx, they are looking for people with 0 to 2 years of experience, so freshers are welcome to apply.

Other than that, here are some more details:

- Willingness to work in different time zones - (Day/Evening or Night shifts)

- Below 30 years of age

- Knowledge of Finance, MS Office Applications like MS Word, Excel, etc., and/or Computer Hardware expertise

- Job location will be in Mumbai and Pune

- Candidate must bring all certificates, degress and work experience letters. Passport size photos are also required.

What will be the job description at E-Clerx for Capital Market segment?
It will be involving pre or post trading settlement, clearing, order management, trade reconciliation, etc. activities.

What will be the job description at E-Clerx for ECommerce segment?
It will involve data management, pricing information management, analytics, web analytics, content management, etc.

I cannot attend the walk-in, how should I apply to E-Clerx?
In their ad, they have mentioned that CV's can be mailed to recruiters@eclerx.com mail-id.
However, when a walk-in is arranged, it is usaully advised to attend the walk-in, so that the chances of selection are more.

Hedge Fund Operations: Introdcution, Example of Hedge Funds

In this article, we will explain the Hedge Fund Operations. All topics, examples, introductions, steps and processes involved in Hedge Fund Operations and Lifecycle are explained:
Hedge Fund Participants:

-- Types of Hedge Funds: Covering all kinds of Hedge Funds and the market participants according to the Hedge Fund

-- Sell-side firms: Basically the market makers in the Hedge Fund industry

-- Administrators: Hedge Fund monitoring

-- Prime Brokers: Who offer brokerage services for Hedge Fund traders

-- Custodians: Offers Custodian services

Hedge Fund Portfolio Management:

-- Positions & Balances within Hedge Fund

-- Indications of Interest: Since Hedge Funds may take a directional view, the interest is of prime importance

-- Pricing / Valuation of Hedge Fund

-- Order Management of Hedge Fund

Hedge Fund Order ? Execution ? Trade: Process of how the order is placed, executed, traded and finally settled

-- Marketplaces

-- Notice of Executions

-- Order versus Executions balancing

-- Average price trades

-- "Done Away" trades

-- Trade Allocation

Hedge Fund Trade Matching, Allocation, Affirmation:

-- Confirmation / Affirmation

-- Resolving exceptions

Hedge Fund Settlement Reporting:

-- Exchange of Value

-- Flow of Information

-- Typical Problems

Hedge Fund Asset Servicing:

-- Income Collection

-- Corporate Actions

-- Valuation

-- Reconciliation

-- Tax Lot Accounting

-- Reporting to Partners & Investors

Hedge Fund Oversight:

-- SEC registration

-- Exemption

-- Offshore regulations

-- Compliance Manual

Emerging Trends in Hedge Fund Industry:

-- IOSCO Recommendations

-- Best Practices

-- Technology

-- Critical Metrics

Tiger Air Singapore IPO: Review Analysis & Details

An airline company based in Singapore is planning its IPO in the local stock Market. It is the Tiger Air or Tiger Airways Company which is planning to come out with its Initial Public Offering or IPO in Singapore.
In this article, we will look at the Review, Analysis and Details of the Tiger Air Singapore IPO and try to do the Review and analysis of Tiger Air Singapore IPO.
Some basic details first about the Tiger Air Singapore IPO, which are available as of now:

- The size of Tiger Air Singapore IPO is expected to be around Singapore Dollar 273 million (195.7 million US Dollars).

- This will be a unique listing - unique in the sense that an asian airline company is going for IPO in 5 years

- Proceeds of IPO will be used for Business Expansion & Infrastructure enhancements

What is the issue size of the Tiger Air Singapore IPO?
Around Singapore Dollar 273 million (195.7 million US Dollars) is the size of the IPO.

How will the capital raised by Tiger Air Singapore IPO be used?
The Proceeds of IPO will be used for multiple purposes: purchasing new aircrafts, repayment of loans or debt as well as setting up a new operating base thereby going for Infrastructure enhancement and operating capacity to be improved.

What is the price band of Tiger Air Singapore IPO?
Around 165 million shares will be sold which will be roughly 30% of the total share capital. The planned IPO size is 273 million S$, so if we go by that calculation, a share of Tiger Airways Singapore IPO may cost around 1.65 S$. However, this is the calculated price, the exact price is not yet confirmed. Its quoted as indicative price of S$1.35 to S$1.65 a share.

How many shares will be sold in the Tiger Air Singapore IPO?
As per the details, around 165 million shares will be sold.

What is the trading symbol & exchange for the Tiger Air Singapore IPO
No info about that

What are the IPO dates for Tiger Air Singapore IPO
The IPO for Tiger Air Singapore will begin sometimes this month i.e. January 2010.

What are the analysts recommendations for this IPO?
It's going to be bet - airline companies across the globe are having a tough time. High fuel costs, high operational cost, reccession and no clear sight of end of recession is preventing any clear recommendations to be given about airline stocks. However, it is seen as a bold move by Tiger Airways to come out with an IPO at such a time since no other asian airline company came out with an IPO in the last 5 years.

What are the business results for Tiger Air Singapore?
The airline suffered a loss of S$50.8 million last year. As for the business, it has 17 Airbus A-320 aircraft in service with orders for another 55 A-320s that will be delivered between now and 2016