As with exchanged-traded markets, participants in over-the-counter (OTC) interest rate markets span a broad spectrum of financial markets operations, ranging from corporations borrowing and lending funds, payment services providers arranging deals for clients or hedging inherited positions, and fund managers and advisers maximising returns for their clients.
Among the OTC interest rate derivatives traded are interest rate swaps and forward rate agreements (FRAs). Because these instruments are traded over the counter, provided a party can negotiate with a willing counterparty all aspects of the contract can be tailored.
In this course you will learn to:
- Define what interest rate swaps and FRAs are, and outline the meaning of market conventions associated with dealing in these financial instruments
- Identify the key participants in OTC fixed interest derivatives markets and their purpose for transacting
- Discuss the sources of risks in trading OTC fixed interest instruments
- Devise simple and complex OTC fixed interest strategies using swaps and FRAs
- Analyse solutions and potential outcomes of OTC fixed interest strategies using swaps and FRAs
- Explain recommended steps to follow when advising clients on OTC fixed interest derivatives.
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Each CPD course has specific learning outcomes, reflections and extra resources and activities, and is assessed via a short online multiple choice quiz. You have 8 weeks to complete the course.