Fixed Income Derivatives Training

Our fixed income training courses cover all aspects of this asset class.  We tend to find that of all the asset classes we teach this is the one that people tend to struggle with most.  For example, during our graduate training courses, the participants tend to be well versed in equities and are adept at option theory; however, once the topic moves to fixed income it is common for participants to suffer from a bout of MEGO (“my eyes glaze over”). 

We have also published a number of free primers which are available here

Bonds

Our training courses start by covering the fundamentals of bonds including topics such as market and credit risk.  One of our more popular ‘intermediate’ teaches participants the different techniques that are used to identify value within a population of sovereign bonds using various measures of spread (e.g. z spreads, option-adjusted spreads, asset swapped spreads).

Fixed income derivatives

In theory, a swap should be an easy product to understand – after all it is only an exchange of cash flows.  Understandably though, participants new to subject do find the product somewhat confusing.  As a result the approach we take is to present a swap as a substitute for a funded position in a government bond.  The basic idea is that an investor can choose either to buy a bond and finance it through the repo markets or receive a swap rate and pay LIBOR. 

FMT can offer training courses on fixed income options such as caps, floors and swaptions.  Inevitably each client’s needs will be different and so if there is something you are looking for please feel free to contact us. 

Inflation-Linked Bonds and Derivatives

We also offer training courses on inflation.  Topics covered include:

• Inflation-linked bonds (ILBs)
• Zero coupon inflation swaps
• Asset swapped ILBs
• Inflation options

Even experienced practitioners have found this topic challenging.  See our blog for some of the common inflation myths associated with this topic.  

One of the company's principals has co-authored a text on the subject published by Wiley - 'Trading the fixed income, inflation and credit markets'.