Foreign Exchange

by Bob Lyddon
access120 days access
cpd hours4 CPD hours
price£75+vat

This course will enable you to:

  • Understand how foreign exchange risks arise, and how they can turn into profit or loss
  • Familiarise yourself with financial contracts available for fixed exchanges of currency
  • Appreciate the relationship between currency volatility and the price of options
  • Advise on "over-the-counter" and "exchange-traded" modes of trading foreign exchange financial instruments for delivery in the future
  • Discover different types of supplier of foreign exchange service along with some specialist new entrants

Many organisations have to deal in currencies different to their own base currency, whether this is through using foreign suppliers or accepting payment from customers overseas. Either way, this can introduce risks and complications. In order to advise your organisation and your clients, you need to understand the steps organisations can take to hedge against the risks and perhaps even reap some rewards.

This course offers a detailed insight into the world of foreign exchange. Get to grips with the risks to your organisation arising from foreign exchange and assess your options for minimising that risk. Learn about spot and forward transactions and why volatility between currencies plays a key role in determining the price of options. You'll also compare and contrast the two main modes of trading foreign exchange financial instruments for delivery in the future.

Foreign exchange risks

  • How risk arises
  • Purchases and sales in foreign currency
  • Investments in foreign currency
  • Disguised exposures
  • Budget exchange rates
  • Budgets and assumed rates
  • Hedging transaction-based risk
  • Hedging translation risk on investments

Economics of spot and forward

  • How contracts are priced
  • Spot transactions
  • Forward contracts
  • Deriving forward rates
  • Applying the pips to the spot rate
  • Future foreign exchange contracts

Economics of options

  • Foreign exchange options
  • Call and put options
  • The risks of options
  • Size of the option premium
  • Options, forwards and you

Over-the-counter and exchange-traded

  • Over-the-counter: Advantages and drawbacks
  • Lifecycle of an OTC transaction
  • Exchange-trading
  • Futures and options exchanges
  • Exchange-traded instruments: Advantages and drawbacks
  • Lifecycle of a exchange-traded transaction
  • Buying and selling contracts

Types of provider

  • Fintech
  • Specialist payment firms
  • Risks of working with specialists
  • Types of client
  • Commercial banks
  • Financial market infrastructures
  • Brokers

Bob Lyddon is an experienced management consultant both privately and with PwC. Recent engagements include running the IBOS international banking alliance, designing a cross-currency notional pooling service, advising a UK association of payment providers how to access UK and international payment systems, and advising a major player in global payments as to the opportunities and threats arising from the establishment of a new regulator for the UK's payment systems.

Bob is on the faculty of trainers for the UK Association of Corporate Treasurers, and regularly contributes to industry conferences and periodicals.

With PwC, Bob managed several programmes at the time of the initial introduction of the Euro, and prior to that, in a career in international banking spanning 17 years, Bob designed the "Connector" payments network for Bank Boston, and arranged numerous syndicated loans and derivatives transactions for Chemical Bank/Manufacturers Hanover and for Lloyds Bank International.

Bob Lyddon holds a First Class degree in Modern Languages from the University of Cambridge.

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