Derivative instruments - Forward and future

Whoever has watched "The Wolf of Wall Street" has likely struggled to understand the jobs, products, jargon that surround financial markets. Some of us are still trying to get our way out of this financial jungle and clarify the associated strategies. Demystifying financial instruments is the key objective of the step-by-step programme we propose below.

This training series is designed around 5 complementary building blocks:

• Derivative instruments – The essentials
• Derivative instruments – Forwards and futures
• Derivative instruments – Swaps
• Derivative instruments – Options
• Derivative instruments – Credit derivatives

Our modular approach allows each participant to select their entry point in the programme to best fit cumulated knowledge and experience on this wide topic.

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

• define the general characteristics of forwards and futures;
• gain in-depth understanding of how the instrument operates;
• list how it can best be used on the market: be it in isolation or in combination with other instruments;
• understand the valuation method and what can impact forwards' and futures's value;
• identify major risks associated and determine controls that may mitigate them.

Principle of a forward or future contract, based on the yield curve; use of these products for hedging or for speculative trading purpose
Forwards contracts: the main types of forwards are presented, namely

• on money market rates: FRAs
• on currencies (forex forward), including NDFs contracts
• on equities and on bonds

Futures contracts:

• the exchange clearing room and margining system
• theoretical vs market price of a future
• invoiced amount at delivery
• analysis of futures contracts,
  • on stocks and stock indexes
  • on currencies
  • on money market rates
  • bond futures
  • commodities futures

The content of the session is illustrated by real market examples. It is given in an attractive, understandable way.

This training will be coordinated by Samir Moussaoui, Director at PwC Luxembourg. The different modules will be animated by experts in derivatives.

Samir helps lead our AVS practice in managing and delivering a diverse range of alternative investments and assets valuation engagements, in the context of assurance and non-assurance services, to local and international clients and PwC offices. He has exposure to a wide range of valuation methodologies such as discounted cash flow models, trading and transaction multiple valuations, net asset value approach as well as milestone analyses, primarily in the context of financial reporting.

Samir is Chartered Financial Analyst (CFA) and Chartered Valuation Surveyor (MRICS).