Bourse Game Al Adliyah Ave, Manama

Course details

The course is largely a Computer Simulated game for treasury and non-treasury personnel who want to learn about market practices of dealing with the foreign exchange Market. The game also has a Risk management module, which focuses on enhancing the participant’s capability to manage risk. This includes market factor sensitivities, Value at Risk and other controls for managing trading book. The game designed measures ability of the participants with respect to the speed of response, accuracy and alertness in a tense treasury environment, which also includes risk and business management. It creates a very competitive market environment for all participants to learn various important aspects of Treasury management.

Course will consist of classroom lectures, discussion, quizzes and playing of the treasury game under simulated environment. Participants would be playing in a simulated market environment after most lectures. On day one, we would introduce the game and on subsequent days, participants would be playing spot F.X. in a simulated environment. At the game progresses, it would become more and more complex in line with the market place.

Money Market

Understanding Money Market 

Instruments traded in the money market

• Calculation of simple interest (Discrete and continuous)
• Calculation of Compound Interest (less than one year)
• Calculation of compound interest (more than one year)
• Day/year convention (Use of Basis)
• Concept of Discount factor and discount function
• Concept of Nominal and effective rate
• Cash Flow analysis Tools
• PV & NPV  

Foreign Exchange (FX) Market  

• FX Market Framework
• Market Structure
• Trade Settlement Process
• Concept of Eurodollars
• Growth of Eurodollar Market
• Principal Characteristics of the spot FX Market
• Exchange Rates
• How Spot rates are quoted?
• Calculation of cross rates
• Main Market Participants
• Central Banks
• Commercial Banks
• Brokers
• Corporations & Government bodies
• FX Market Concepts
• Spot deal
• Forward transaction
• Direct and Indirect quotations
• Two way prices
• Bid and offer rates
• The Spread
• Drivers of determining bid and offer spread
• Choosing the best rates
• Customer transactions and its drivers
• Position Keeping
• Establishing profit
• The Average rate
• Exposure gaps and Cash flows
• Spot position keeping
• Reading the Market
• Leads and lags in the trade
• Currency supply and demand
• Other factors influencing the market
• Fundamental
• Institutional
• Technical
• Interpreting News

Forward Transactions

• Forward exchange rates
• Forward interest rates
• Do forward rates predict future spot rates?
• Spot and Forward rates in practice
• General principles for trading and hedging
• Pricing
• Limitations

FX Forward (Synthetic Agreement for Foreign Exchange – SAFE)

• What is a SAFE?
• Definitions & terminology
• The settlement process
• Pricing SAFEs
• Market conventions in quoting SAFEs
• Examples of using a SAFE
• Hedging SAFEs against movements in spot rates
• Capital adequacy requirements for FRAs and SAFEs
• Benefits through FRAs and SAFEs