Description

Fixed Income Online Training Program

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Course Overview:

This course is designed to provide students with the knowledge and skills necessary to trade fixed income securities in today’s financial markets.

The Fixed Income course begins with an overview of the bond market, followed by a discussion of the various types of bonds traded in the market.

The next section of the course covers the mechanics of trading bonds, including bond pricing, yield curves, and interest rate risk. The final section of the course focuses on trading strategies and techniques used by professional traders to profit from changes in the bond market.

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

– Understand the bond market and the different types of bonds traded in the market

– Understand bond pricing, yield curves, and interest rate risk

– Develop and execute trading strategies to profit from changes in the bond market

– Understand the concept of portfolio risk and how to manage it

– Use financial spreadsheets and bond pricing formulae to price bonds

– Analyse yield curves and use them to predict changes in interest rates

– Use duration and convexity to manage risk in the bond market

– Understand the basics of portfolio management and the different types of risks associated with managing a portfolio of securities.

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Curriculum:

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Introduction to the bond market:

In this first section of the course, we will provide an overview of the bond market. We will discuss the different types of bonds traded in the market, as well as the participants in the market.

Types of bonds traded in the market:

In this section of the course, we will discuss the different types of bonds traded in the market. We will cover government bonds, corporate bonds, and mortgage-backed securities.

Bond pricing:

In this section of the course, we will discuss bond pricing. We will cover the factors that affect bond prices, as well as how to calculate the price of a bond.

Yield curves:

In this section of the course, we will discuss yield curves. We will cover the different types of yield curves, as well as how to interpret them.

Interest rate risk:

In this section of the course, we will discuss interest rate risk. We will cover the different types of interest rate risk, as well as how to manage it.

Trading strategies and techniques:

In this final section of the course, we will discuss trading strategies and techniques used by professional traders to profit from changes in the bond market. We will cover a variety of topics, including technical analysis, interest rate forecasting, and hedging.

Course conclusion:

In this final section of the course, we will provide a recap of the material covered. We will also discuss some of the benefits of trading fixed income securities.

 

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Who should attend?

The qualification is suitable for individuals who work in client or market-facing roles in fixed income at a bank or fund management firm, although it has expanded in popularity among middle office and operations managers wanting more product and market insight.

Individuals working for financial IT service firms, exchanges, and central securities depository organizations are also included as potential candidates.

 

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Relevant topics and concepts include:

Fundamental Numerical Skills:

Financial markets are driven by numbers. In order to make sound investment decisions, it is essential to have a strong understanding of the numerical concepts that underlie the markets. This section of the course will introduce you to the basic mathematical skills that are necessary for success in finance.

The Main Fixed Income Securities and Derivatives:

Fixed income securities are the foundation of the global financial system. In this section of the course, we will take a close look at the main types of fixed income securities and derivatives. You will learn about the features of each type of security and how they are traded in the market.

Risk and Return Concepts:

All investments carry some degree of risk. In this section of the course, you will learn about the different types of risk that are associated with investing in fixed income securities. You will also learn about the concept of expected return and how it is used to compare different investment options.

The Time Value of Money:

The time value of money is one of the most important concepts in finance. In this section of the course, you will learn how to use time value of money techniques to make sound investment decisions.

Interest Rates:

Interest rates play a central role in the fixed income markets. In this section of the course, you will learn about the different types of interest rates and how they are used to price different types of securities.

Bond Mathematics:

Bonds are the most important type of fixed income security. In this section of the course, you will learn about the mathematics that is used to price and trade bonds. You will also learn about the different types of bond risks and how they can affect your investment decisions.

Financial Spreadsheets and Bond Pricing Formulae:

In this section of the course, you will learn how to use financial spreadsheets to price bonds. You will also learn about the different bond pricing formulae that are used in the market.

Analysing Yield Curves:

Yield curves are an important tool that is used by traders and investors to make investment decisions. In this section of the course, you will learn how to analyse yield curves and how they can be used to predict changes in interest rates.

Duration and Convexity:

Duration and convexity are two important measures that are used to manage risk in the bond markets. In this section of the course, you will learn how to use duration and convexity to make sound investment decisions.

Concepts for Portfolio Management:

In this section of the course, you will learn about some of the key concepts that are used in portfolio management. You will also learn about the different types of risks that are associated with managing a portfolio of securities.

 

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Useful Glossary of Relevant Terms and Concepts:

 

Abandonment: The legal termination of all rights and obligations under a contract.

Absolute priority: In a Chapter 11 bankruptcy, the principle that junior creditors cannot receive payments until senior creditors are paid in full.

Accounts payable: Money owed by a company to its suppliers for goods or services purchased on credit.

Accrued interest: Interest that has accumulated since the most recent interest payment was made.

Amortization: The process of reducing the value of an intangible asset over time through periodic charges to income.

Asset-backed security: A type of investment that is backed by a pool of underlying assets, such as auto loans, credit card receivables, or home loans.

Balloon payment: A lump-sum payment that is made at the end of a loan’s term.

Bankruptcy: A legal process through which a company’s assets are liquidated and its creditors are paid in an orderly manner.

Bond: A debt security that obligates the issuer to make periodic interest payments to the bondholder, as well as to repay the principal amount of the loan at maturity.

Bond pricing techniques: mathematical models that are used to determine the fair value of a bond.

Bond trading: The buying and selling of bonds in the secondary market.

Bond valuation: The process of determining the present value of a bond’s future interest payments and principal repayment.

Bridge loan: A short-term loan that is used to finance a company’s activities until it can obtain long-term financing.

Call provision: A clause in a bond contract that allows the issuer to redeem the bond before its maturity date.

Capitalization: The process of converting a company’s debt into equity.

Capital expenditure: Money that is spent to acquire or improve a long-term asset, such as property, plant, or equipment.

Capital markets: Markets in which long-term debt and equity securities are traded.

Capitalization rate: The rate of return that is required by investors in order to compensate them for the riskiness of an investment.

Commercial paper: A short-term debt instrument that is issued

Cash flow: The net amount of cash that is generated by a company’s activities in a given period.

Chapter 11 bankruptcy: A type of bankruptcy that allows a company to reorganize its business and repay its creditors over time.

Clean prices: Bond prices that exclude accrued interest.

Closed-end fund: A type of investment fund that raises a fixed amount of capital through an initial public offering, and then invests that capital in a diversified portfolio of securities.

Collateral: Assets that are pledged as security for a loan.

Commercial paper: A type of short-term debt security that is issued by a corporation.

Common stock: The type of stock that is typically issued by a company to its common shareholders. It entitles the holder to vote at shareholder meetings and to receive dividends.

Convertible bond: A type of bond that can be converted into shares of the issuer’s common stock.

Coupon: The interest rate that is paid on a bond.

Credit: An arrangement in which a lender provides a borrower with funds on the condition that the borrower repay the loan, with interest, at a later date.

Credit rating: A measure of a company’s creditworthiness, based on its ability to repay its debts.

Credit risk: The risk that a borrower will default on a loan.

Credit spreads: The difference in yield between two bonds of similar risk.

Current assets: Assets that are expected to be converted into cash within one year.

Current liabilities: Liabilities that are expected to be paid within one year.

Debt: Money that is owed by a borrower to a lender.

Debt ratio: A company’s total debt divided by its total assets.

Debt-to-equity ratio: A company’s total debt divided by its shareholder equity.

Debenture: A type of unsecured bond that is backed by the general credit of the issuer.

Debts markets: Markets in which debt securities are traded.

Dilution: The increase in the number of a company’s shares outstanding that results from the issuance of new shares.

Default: Failure to make a required payment on a debt security.

Deferred tax asset: An asset that represents the future reduction in taxes that will occur as a result of expenses that have been incurred but not yet recognized for tax purposes.

Depreciation: The process of allocating the cost of a long-term asset over its useful life.

Derivative: A financial contract whose value is derived from the performance of another underlying asset.

Discount rate: The interest rate that is used to discount the future cash flows of a project to their present value.

Dividend: A distribution of a company’s earnings to its shareholders.

Earnings before interest and taxes (EBIT): A measure of a company’s profitability that excludes the effects of interest and taxes.

Earnings before interest, taxes, depreciation, and amortization (EBITDA): A measure of a company’s profitability that excludes the effects of interest, taxes, depreciation, and amortization.

Equity: The ownership interest that shareholders have in a company.

Exchange-traded fund (ETF): A type of investment fund that is traded on an exchange, like a stock.

Face value: The principal amount of a debt security.

Financial analyst: A professional who provides analysis of a company’s financial statements.

Financial ratio: A ratio that is used to assess a company’s financial performance.

Financial statement: A report that shows a company’s financial position, performance, and cash flow.

Fixed asset: A long-term asset that is not intended for sale in the normal course of business.

Fixed Income: Investments that provide a fixed return, such as bonds.

Fixed income markets: The markets for investments that provide a fixed return, such as bonds.

Fixed income instruments: The investment products that provide a fixed return, such as bonds.

Fixed income derivatives: Financial contracts whose value is derived from the performance of a fixed income instrument.

Fixed income concepts: The basic ideas behind investing in products that provide a fixed return, such as bonds.

Fixed income trading: The buying and selling of fixed income instruments in the secondary market.

Fixed income portfolio: A collection of fixed income instruments held by an investor.

Fixed-rate bond: A type of bond that pays a fixed rate of interest over its term.

Float: The number of shares of a company’s stock that are available for trading.

Floating rate bond: A type of bond whose interest rate is periodically adjusted based on changes in a benchmark interest rate.

Foreign exchange risk: The risk that the value of a currency will change due to changes in exchange rates.

Forward contract: A type of derivative that allows two parties to agree to buy or sell an asset at a future date.

Fundamental analysis: A method of evaluating a security that focuses on its intrinsic value.

Future: A type of derivative that allows two parties to agree to buy or sell an asset at a future date.

Gain: An increase in the value of an asset.

Hedge: A financial position that is taken in order to offset the risk of loss on another investment.

High yield bonds: A type of bond that pays a higher interest rate than other bonds because it is considered to be a higher risk investment.

Income statement: A financial statement that shows a company’s revenues, expenses, and net income.

Index fund: A type of investment fund that invests in a portfolio of securities that tracks a particular index.

Initial public offering (IPO): The process by which a company raises capital by selling shares of its stock to investors.

Instrument: A financial contract that represents a financial asset or liability.

Interest: The cost of borrowing money, typically expressed as a percentage of the principal.

Interest rate derivatives: Financial contracts whose value is derived from the performance of a debt instrument.

Interest rate risk: The risk that the value of a security will change due to changes in interest rates.

International diversification: The process of investing in assets that are located outside of one’s home country.

Investment: The act of putting money into a financial asset in the expectation of earning a return.

Investment risk: The risk that an investment will lose value.

Leverage: The use of debt to finance the purchase of an asset.

Liability: A financial obligation.

Liquidity risk: The risk that an investment will be difficult to sell at its fair value.

Listed company: A company whose shares are traded on a stock exchange.

Long position: A position in a security that is purchased with the expectation that it will increase in value.

Macroeconomic risk: The risk that the performance of an investment will be affected by macroeconomic factors.

Margin: The amount of money that is borrowed to finance the purchase of an asset.

Mark-to-market: The process of valuing a security at its current market price.

Maturity: The date on which a debt security will mature and the principal will be repaid.

Minimum variance portfolio: A portfolio that is constructed to minimize the risk of loss.

Monetary policy: The actions taken by a central bank to influence the supply of money in an economy.

Money markets: The markets for short-term debt instruments.

Moody’s: A rating agency that provides credit ratings for bonds.

Morningstar: A research firm that provides information on investments.

Mutual fund: A type of investment fund that pools money from investors and invests in a portfolio of securities.

Net asset value (NAV): The value of a mutual fund’s assets minus its liabilities.

Offer: The price at which a security is offered for sale.

Option: A type of derivative that gives the holder the right, but not the obligation, to buy or sell an asset at a future date.

Over-the-counter (OTC): A market where securities are traded between two parties, without the use of an exchange.

P/E ratio: The price-to-earnings ratio, which is a measure of a company’s stock price relative to its earnings.

Par value: The face value of a bond.

Passive investing: An investment strategy that involves buying and holding a portfolio of securities for a long period of time.

Payout ratio: The percentage of a company’s earnings that are paid out as dividends.

Portfolio: A collection of assets.

Preferred stock: A type of stock that gives the holder preference in the event of a liquidation.

Price-to-earnings ratio (P/E ratio): The price-to-earnings ratio, which is a measure of a company’s stock price relative to its earnings.

Price-to-book ratio (P/B ratio): The price-to-book ratio, which is a measure of a company’s stock price relative to its book value.

Private equity: A type of investment that involves the purchase of shares in a privately held company.

Prospectus: A document that contains information about a security.

Publicly traded: A security that is traded on a stock exchange.

Real estate investment trust (REIT): A type of investment that invests in real estate.

Recession: A period of economic decline.

Redemption: The act of repaying a debt security before it matures.

Repo: A type of short-term loan that is secured by collateral.

Risk: The chance of loss.

Risk aversion: The preference for avoiding risk.

Risk-adjusted return: The return on an investment after adjusting for risk.

Risk management: The process of identifying, measuring, and managing risk.

Risk measures: Quantitative measures of risk.

Risk-free rate: The return on an investment that is guaranteed not to lose money.

S&P 500: A stock market index that tracks the performance of 500 large US companies.

Securities: Financial instruments that are used to raise capital.

Risk premium: The amount of return that an investor requires for taking on additional risk.

Risk-return tradeoff: The relationship between risk and return.

S&P 500: An index of 500 large-cap stocks that is used to measure the performance of the stock market.

Secondary market: A market where securities are traded between two parties, without the use of an exchange.

Sector: A group of industries that are related to each other.

Shareholder: An owner of a company’s stock.

Short position: A position in a security that is sold with the expectation that it will decrease in value.

State boards: The organizations that regulate the securities industry in each state.

Stock: A type of security that represents ownership in a company.

Stock split: A corporate action in which a company’s stock is divided into multiple shares.

Stop-loss order: An order to sell a security when it reaches a certain price.

Systematic risk: The risk that cannot be diversified away.

Tax-advantaged account: An account that allows investors to defer or avoid taxes on their investments.

Tenants-in-common: A type of co-ownership in which each owner has an undivided interest in the property.

Time horizon: The length of time that an investment is held.

Treasury bill (T-bill): A type of short-term government debt security.

Treasury bond (T-bond): A type of long-term government debt security.

Unsystematic risk: The risk that can be diversified away.

Volatility: A measure of the fluctuations in a security’s price.

Weighted average cost of capital (WACC): A measure of a company’s cost of capital that takes into account the weights of each type of capital.

Yield: The percentage return on an investment.

Yield calculations: A method of assessing an investment’s return that takes into account the interest payments and the price appreciation or depreciation.

Yield curve: A graph that shows the relationship between yields and maturity dates.

Yield to maturity (YTM): The rate of return that an investor will receive if a bond is held to maturity.

Z-score: A measure of a company’s financial health.