SC Licensing Examination Revision

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SCLE Revision: Futures and Options  (Module 14)

Module 14: Futures and Options

Duration: 2.5 days
Venue: Securities Commission Malaysia

Programme Objective

This course equips participants with comprehensive understanding and knowledge based on the Module 14 Study Outline. Participants will advance their knowledge and comprehension further via an interactive teaching and learning experience while increasing their confidence in sitting for the examination.  This course will be facilitated by an experienced and qualified trainer. 

Programme Overview

This 2 ½ -day course is designed to match the licensing study outline for Module 14 on futures and options. The topics covered are development of the futures market, types of futures market and its trading, options market and its trading strategies.  

Who Should Attend
  • Candidates preparing for the Module 12 licensing examination
  • New entrants to the capital market industry and staff of investment banks

  • Programme Delivery

    Learning Outcomes

    Candidates are expected to have good knowledge, understanding and ability to apply in the following areas:

    • Concepts and structure of the futures and options markets
    • Product knowledge on all contracts that are currently available on Bursa Derivatives
    • Hedging, arbitraging and speculative trading strategies using derivatives contracts available on Bursa Derivatives
    • Derivatives trading strategies including pay-off diagrams
    • Valuation of derivatives instruments
    • Derivatives pricing models and their uses in derivatives trading
    • Market analysis - fundamental and technical analysis of futures market

    Candidates' Prerequisites

    It is estimated that this module will require a minimum of 80 hours of study time. Candidates are expected to have relatively strong capability in the application and analysis of information provided in this outline and its reference. The amount of study hours needed depends on the education background and work experience of the candidates. Candidates are also expected to update themselves with the latest changes relevant to this module as all questions will be continuously updated to reflect these changes.

    Methodology

    This course will be delivered using effective learning methods which include presentations, discussions and review examination questions.
  • Programme Outline

    PROGRAMME – DAY ONE
    8.30am Registration
    9.00am Development of the Futures Market
    • Dawn of the Forward Market
    • The Forward Contract
    • Types of Forward Contracts
    • Forward Price and the Cost of Carry
    • Disadvantages of Forward Contracts
    10.45 am Refreshment
    11.15am The Workings of the Futures Market
    • Futures Contract Specifications
    • Types of Futures Contracts
    • Advantages of Futures Market
    • Disadvantages of Futures Contract
    • Convergence of Futures to Spot Prices
    • Futures Prices and Cost of Carry
    • Market Participants: Hedgers, Speculators and Arbitrageurs
    1.00pm Lunch
    2.00pm Trading the Futures Contract
    • Uses of Futures: Hedging, Speculating and Arbitraging
    • Types of Orders
    • Margining and Daily Settlement
    • Open Interest and Volume
    • Closing Out Positions
    • Negotiated Large Trade (NLT)
    • Exchange for Related Positions (EFRP)
    • Technical Analysis
    • Fundamental Analysis
    3:40pm Refreshment
    4.00pm Trading Futures in Malaysia
    • Overview of Regulation of Futures Trading
    Trading Commodity Futures
    • Crude Palm Oil Futures (FCPO)
    • Crude Palm Kernel Futures (FPKO)
    • USD Crude Palm Oil Futures (FUPO)
    • Gold Futures (FGLD)
    • USD RBD Palm Olein Futures Contract (FPOL)
    Trading Equity Futures
    • FTSE Bursa Malaysia KLCI Futures (FKLI)
    • Single Stock Futures (SSF)
    Trading Financial Futures
    • Kuala Lumpur Interbank Offered Rate Futures (FKB3)
    • 3-Year Malaysian Government Securities Futures (FMG3)
    • 5-Year Malaysian Government Securities Futures (FMG5)
     
    5.30pm
     
    End of Day One
     
    PROGRAMME – DAY TWO
    8.30 am  Registration
    9.00 am The Options Market
    • Basic Concepts
    • Underlying Instruments
    • Option Contract Specifications
    • Uses of Options
    • Advantages and Disadvantages of Using Options
    • Listed Stock Warrants and Structured Warrants
    10.45 am  Refreshments
    11.00am Options Valuation
    • Intrinsic and Time Value
    • Factors Affecting Options Value
    • Options Pricing Models
    • Option Greeks
    • Put-Call Parity
    • Payoff Diagrams
    1.00 pm  Lunch
    2.00 pm  Trading Strategies with Options
    • Directional Strategies Using Single Options
    • Spread Trades
    • Volatility Strategies
    • Synthetic Strategies
     
    3.45 pm  Refreshments
    4.00 pm Trading Strategies with Options (cont’)
    • Dynamic Hedging Using Option Delta
    • Managing an Options Portfolio
    5.30 pm End of Day Two
     
    PROGRAMME - DAY THREE
    9.00am Trading Options in Malaysia
    • Warrants
    • Options on FTSE Bursa Malaysia KLCI Futures Contract (OKLI)
    • Options on Crude Palm Oil Futures Contract (OCPO)
    • Use of Options in Portfolio Management
    10.30am Refreshments
    10.45am Revision and Feedback Session on Set of Questions
    12.30pm End of Programme
     
  • Programme Fees

    RM 954.00 (Inclusive of 6% GST)