Capital Markets- 4 Days

Day1:

Introduction to financial markets (2.5 hours)     

Purpose of Financial Markets

·                     Economic life cycle

·                     Implication for different entities

·                     Flow of money between the entities

·                     Money Supply

·                     Inflation & Interest Rates

·                     Business Cycles

Overview of Financial Markets

Concept of Asset Class

·                     Equity

·                     Debt

·                     Forex

·                     Commodities

Use of each Asset Class (in brief)

Concept of Primary Market and Secondary Market

Difference between basic asset class and derived asset class

Primary market

·                     Methods of issue of securities

·                     Players

·                     Regulations

Secondary market

·                     Players

·                     Securities

·                     Methods of trading

·                     Regulations

Types of financial markets

·                     OTC

• Securities traded
• Rationale
• Disadvantages
• Regulations

·                     Exchange traded

• Securities
• Regulations
• Advantages & disadvantages

Money Markets Instruments (2 Hours)

Introduction to Money Markets

Money Markets Instruments

Money Markets Participants

Repurchase (Repo and Reverse Repo) transactions

Overnight Interbank Loan Markets

LIBOR (London Interbank Offered Rate)

Certificate of Deposit

Commercial Paper

Introduction to Equity (3 hours)

Equity securities

·                     What are equity shares?

·                     Risk and reward

·                     Capital structure – when would a company issue equity securities versus debt securities?

Day 2

Introduction to Equity (3.5 hours)

Variants of equity shares

·                     Depository receipts

·                     ADRs

·                     GDRS

·                     Equity warrants

·                     Traditional warrants (warrants linked bond)

·                     Covered warrants

Issue of equity shares (IPO, FPO, Offer for Sale and Private placement)

Secondary trading of equity shares

·                     European equity markets

•             MiFID categories of trading venues – regulated markets, multilateral trading facilities and systematic internalizer

•             High frequency trading (in brief)

•             Dark pools and lit markets (in brief)

•             Algorithmic or black box trading (in brief)

•             Over the counter markets (in brief)

•             Types of trade (in brief)

•             Order book (lit and hidden)

•             Auction

•             Dark order book

•             Real time on exchange reported

•             Delayed on exchange reported

•             Real time off exchange OTC

•             Delayed off exchange OTC

•             Time in Force (TIF) orders

•             Order matching Priority – Price Time, Quantity based ,etc.

•             Financial Information Exchange (FIX) Protocol

•             FIX Adapted for Streaming Protocol (FAST)

Equity markets

·                     RegNMS categories of trading venues – automated quotes (fast markets) and manual quotes (slow markets)

·                     Major stock exchanges

·                     Broker sponsored execution venues

·                     Alternative trading systems

·                     Lit and dark markets

·                     High frequency trading

·                     Algorithmic trading

·                     Over the counter markets

·                     Types of orders (Market, Limit, Short Sale and Special Orders)

Buying on margin

European Post Market Trading Mechanism

Introduction to Fixed Income (4 hours)

Difference between stock market and bond markets

Characteristics & Features

Instruments of Fixed Income Markets

Major Players

Different Markets (Governments Markets, Money Markets, Corporate Bonds, Agency Bonds, Municipal Bonds)

Ratings

Pricing Conventions and Interest rates

Present Value, Future Value, compounding, discounting, Price vs. Yield, Types of Yield (Current yield, Nominal yield, yield to maturity, yield till date and yield to call)

Day 3

Overview of Foreign Exchange Markets (2.5 hours)

Forex market terminologies

Structure of the Forex market

Forward Trades

Hedging/Speculation/Arbitrage

Forex Risks

Introduction to Derivatives (5 hours)     

Derivatives Overview

·                     Need for Derivatives

·                     Products

·                     Participants and Functions

·                     Exchange Traded vs. OTC Derivatives

Market Index

·                     Index Construction

·                     Desirable attributes of an index

·                     Application of Index

Forward Contracts

·                     Introduction to Forward Contracts

·                     Limitations of forward contracts

Futures Contracts

·                     Introduction to Futures Contracts

·                     Futures Terminology

·                     Standardized Exchange traded contractsDay 4

Introduction to Derivatives (2.5 hours) 

Options Contracts

·                     Introduction to Option Contracts

·                     Calls and Puts

·                     Options Terminology

·                     Options Characteristics

Commodities (1 hour)   

What is commodity market

·                     Market Players

·                     Basic Features

Life Cycle of a Trade (4 hours)   

Trading & settlement

Market place

·                     Participants

·                     Regulators

·                     Custodians

Types of transactions

Trade enrichment

Trade validation

Settlement Instructions

Corporate actions

Reconciliations