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Training on Fx and Rates Exotic for Banks & Large Corporate Executives

Banks need to prepare for Fx and Rates Exotic options as allowed by RBI. Around 4 months back we conducted a detailed training for one of the largest bank in India. In this environment, we are launching a detailed interactive training over Zoom video.

Training on Fx and Rates Exotic for Banks & Large Corporate Executives

Banks need to prepare for Fx and Rates Exotic options as allowed by RBI. Around 4 months back we conducted a detailed training for one of the largest bank in India. In this environment, we are launching a detailed interactive training over Zoom video.

Session Details

Session 118th Apr,
11:00 AM-12:30 PM
RBI Circulars,  Background FX exotics: payoffs and instrument descriptions
Session 218th Apr,
1:30-3:00 PM
Fx Exotics structuring and using the options optimally
Session 319th Apr,
11:00 AM-12:00 PM
Trading and pricing considerations for Fx exotics
Session 419th Apr,
1:30-3:00 PM
Interest rate and Hybrid exotics - Instruments and pay offs.
Session 525th Apr,
11:00 AM-12:00 PM
Interest rate and Hybrid exotics - structuring and optimal usage. Risk and mitigations. Pricing.
Session 625th Apr,
1:30-3:00 PM
Implementation and operational aspects for Banks and corporates.

Session Details

Sess 1RBI Circulars,  Background
FX exotics: payoffs and instrument descriptions
18th Apr, 11:00-12:30
Sess 2Fx Exotics structuring and using the options optimally
18th Apr,
13:30-15:00
Sess 3Trading and pricing considerations for Fx exotics
19th Apr,
11:00-12:30
Sess 4Interest rate and Hybrid exotics - Instruments and pay offs.
19th Apr,
13:30-3:00
Sess 5Interest rate and Hybrid exotics - structuring and optimal usage. Risk and mitigations. Pricing.
25th Apr,
11:00-12:30
Sess 6Implementation and operational aspects for Banks and corporates. 25th Apr,
13:30-15:00

For Details

Call: +91 9883195123 Or +91 7980397803

Email: [email protected]

Register for Training

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Exotic Options Write UP

The background of this writeup is that RBI, in their recent circular, has allowed exotic options to be used in India from 1st June 2020.

I am assuming a reader here knows very well vanilla options which are calls and puts. Now using vanilla options in combination you can make option structures and call them strangle, straddle, seagull, risk reversal, seagull, Call spreads and put spreads, collar or range forwards, ratio forwards, calendar spreads etc. Now these are not exotic options but these will classify as option structures using vanilla options. RBI at times call them cost reduction structures since these options involve sold optionality to reduce option premium for hedging.

Exotic options will be the knock out options, Knock in options, binary options, accruals, target redemption options etc. Let’s take a few examples for an Indian importer – how these structures will look and how they may help. Remember options are like nuclear technology – how you use it is up to you.

Importer’s exotic option examples with hypothetical pricings –

Spot assumed 76.00 , forward rate for 3 months 76.75 with forward premium being 75 paisa. Vanilla option strike 76.00 costs 150 paisa and vanilla option strike 77 costs 75 paisa.

Knock out option example :

  1. Importers can buy USDINR at 75.00 provided 82.00 is not traded during this 3 months period ever.
  2. Importers can buy USDINR at 75.75 provided at maturity USDINR spot < 80.00

Knock in option example :

If 75.00 is ever traded during this period then importers will have a simple forward @ 75.00 else if 75.00 is never traded during this period then the forward rate would be 77.50.

Combining Knock in and knock out

If 74.00 is ever traded during this period then importers will have a simple forward @ 75.00 else if 75.00 is never traded during this period then the forward rate would be 76.75. This whole option will knock out if 82.00 is ever traded during this period.

These are only a few examples of how exotic options can be used to appropriately translate your view into a hedge solution. The possibilities are endless. More on exotics coming up soon.

Also we have an upcoming training on exotic options for large banks and corporates. You can call us for more details.

For Details

Call: +91 9883195123 Or +91 7980397803

Email: [email protected]