Your undergraduate degree or even MBA
in finance didn't prepare you for the realities of how markets
and their underlying infrastructure work today. Regulatory
changes, technology and competitive responses have
dramatically changed our markets and trading practices.
We have over 50 market places, ECNs, Alternative Trading
Systems (ATSs), internalized markets as well as a now
electronic NASDAQ and Designated Market Maker based
NYSE. What is the mysterious dark liquidity and naked
access?
60-75% of equity trading in the US is done
electronically with algorithms, high frequency quant models
and automated market makers. We need to understand
Transaction Cost Analysis (TCA) and of course many new
instrument types. Even our trusty Efficient Market
Hypothesis is being overtaken by behavioral
finance.
Whether you are new to the field
or have been focused on the specifics of your job, this course
will update and broaden your understanding of the US
financial services
industry.
Introduction to the Financial
Services Industry
- How is the financial services industry
organized
- What are the functions of banking,
securities, insurance, markets
- What is financial intermediation
- Differences between retail and
institutional, buy side and sell side
- What is the impact of market convergence
- How firms raise capital, The IPO
process and Google’s Dutch auction
- How to research a firm
Intro to Modern Portfolio Theory
- What is the logic in portfolio
creation
- What is the Capital Asset Price Model
(CAPM)
- What is the Efficient Markets Hypothesis
(EMH)
- Risk vs. reward in creating portfolios
- How has this driven the market for index
funds
- What are the problems in the theory
- What is behavioral finance
General Introduction to Markets and
Trading
- What are the functions of markets
- Types of market models, quote drive,
order driven, dealer, electronic matching
- Who are the players in placing an order
from buy side to sell side to market
- What are mutual funds, hedge funds,
ETF’s
- Order types, market, limit, reserve,
etc. and how they're used
- Quoting of bids and offers – reading a
quote
- Impact of decimalization
Order Management Systems
- How was trading done via the phone
- How Order management Systems
(OMSs) manage order flow between the buy and sell
side and markets
- How are they connected with the FIX
protocol
- What are Execution Management Systems
(EMSs)
- What are the differences between retail
and institutional systems
- What is Straight Through Processing
(STP) and its benefits
New York Stock Exchange
- What was the history of the NYSE
- How is the floor organized in posts and
booths
- What was a seat
- Who are the people on the floor,
brokers, (house and $2) and the specialists - What did
they do
- What was the trading process
- What happened in 2005 – the new NYSE
Group
- Merger with Arca Exchange
- Impact of Reg NMS
- The new model using Designated Market
Makers (DMMs) -- the new electronic trading process
- International mergers
- Future of the NYSE
NASDAQ
- What is the history of NASDAQ
- How did abuses and regulation drive it
- How did its multi-dealer model work;
What is its trading process and rules
- How does an order book work
- What are ECN's and what was their
impact
- What happened for NASDAQ to became
an “exchange”
- NASDAQ Market LLC and the Trade
Reporting Facility (TRF)
- What are NASDAQ’s future plans
Institutional Trading
- The institutional search for liquidity
- Transaction Cost Accounting (TCA/TCR)
- Benchmarks, VWAP, implementation
shortfall etc.
- Direct Market Access (DMA)
- Execution Management Systems (EMS)
- Alternative Trading Systems, e.g.,
Liquidnet, Pipeline, etc., internalized markets and dark
liquidity
- Algorithmic Trading
- Naked Access
- Dark liquidity
- Post trade analytics
- Stat arb, pairs trading and other
quantitative high frequency trading methods
Introduction to Fixed Income
- Fixed income
instruments
--Treasuries, corporates, money markets,
munis
- Yield and return
- Duration and convexity
- Trading models, dealers and electronic
- Interest rate swaps
- Structured finance – CMO’s,
CDO’s, CDSs
- What went wrong with sub-prime mortgages
- Delphi short squeeze and ISDA
settlement
Introduction to Foreign Exchange and
Forwards
- Why trade forward or future
- How to read FX rates
- What are FX forwards
- How are forward rates calculated
- How are FX rates related – purchasing
power parity
- How are cross rates calculated
- FX swaps
Introduction to Futures, Options and
SWAPS
- What are futures
- How are they traded
- What is in the futures contract
- What are the margin requirements
- What are options
- How are they traded
- How are they valued – Black Scholes
model
- What are the Greeks
- How do futures and options
differ
After the Trade
- What is clearance
- What is settlement
- What are T+1 and T+3 processes
- What are the functions of a prime
broker, or custodian
Introduction to Risk Management
- What is risk
- What is the Basel II Accord
- What are market, credit, liquidity and
operational risk
- What is Value at Risk (VaR)
- What are Sharpe and Sortino ratios
- What are keys to a risk management
system
Wrap up, summary and
sources of further information.
Additional
available modules for in house courses:
- Retail Payment Systems Checks, Debit, Credit, RFID and
Stored value Cards
- Institutional Payment Systems, Fedwire, CHIPS and SWIFT
- Internet Security, SSL and Encryption for on-line
transactions
Capital Markets BootCamp is a
Registered Service Mark of Conatum Consulting
LLC
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"Very well presented; very knowledgeable trainer who
got the point across and you could tell he knows what he is
talking about."
"Bernard kept it interesting, very
easy to hear and did a great job responding to
questions."
"Presentation was done in a fast moving
environment, timely, had a good time, picked up a great deal
of information that will be useful to me."
"Great
content and good examples. Speaker very knowledgeable."
"Very interesting class. Great coverage."
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