Sales & Trading

This training provides an overview of financial markets and showcases applications of economics on Wall Street. Our instructor will  decode industry jargon and walk through the economic indices that matter most. Trainees learn the foundational skills needed to cover clients and deliver market updates.

Introduction to Financial Markets

• Introduction to Stocks and Bonds
• Equities Overview: Common, Preferred, Convertibles, ETFs
• Types of Bonds: Treasuries, Agencies, Corporates, Municipals, SSA, MBS, ABS, CLOs
• Derivative Markets: Swaps, Options, Futures
• Currency Markets
• Commodity Markets

Market Participants

• Supply and Demand of Capital
• Investors, Investors, Broker/Dealers, Exchanges, Clearinghouses
• Role of an Investment Bank

Regulation and Documentation

• Prospectus and Registration
• 1933 Act, 1934 Act, 1940 Act and Key Exemptions
• JOBS Act Changes for IPOs
• Dodd-Frank Changes

Microeconomics

• Demand vs Supply
• Relative Value and Substitution
• Book building vs Auction

Macroeconomics

• Goals of a Central Banks
• Tools of a Central Bank
• Interpreting Fed Statements

Fiscal Policy and US Treasuries

• Fiscal Policy and Debt Issuance
• US Treasuries Conventions

Economic Indictors

• Overview of Key Indicators
• Expectations vs. Surprise
• Yield Curve Analysis

Markets Soft Skills

• How to communicate market movements to clients
• Voice skills, best practices for delivering client updates over the phone

We expect most participants interested in Sales and Trading to have traded stocks in your personal brokerage account. We’re not going to teach you which stocks to buy, but how the exchanges and how the Wall Street trading floor actually works. We’ll show you how financing and Prime Brokerage play a role into how the markets function. We’ll explore the Delta One Markets and the interactions between Stocks, Futures, ETFs and TRS. Volatility and Options are next, covering Option Theory well beyond what is tested for the Series 7. We spend time not only analyzing the Greeks to arrive at the correct option price, but also how to delta hedge an option and risk manage it afterwards. We conclude the day focused on Convertible Bonds and Structured Notes to apply option theory beyond vanilla options.

Cash Equities

• Overview of Equity Market Participants
• Role of the Investment Bank
• Role of Equity Research
• How exchanges match buyers and sellers
• Key Indicators (Volume, VWAP, Depth, Imbalance)
• Calculating Open and Closing Prices
• Calculating Settlement Amounts and Commissions
• Securities Lending and Prime Brokerage Overview

Delta One and ETFs

• What is a Stock Index (e.g. S&P 500), How is it Constructed and Rebalanced?
• Impact of Dividends
• Similarities and Differences between:
  • Buying the underlying portfolio
  • Buying an ETF
  • Buying a Future
  • Entering into a Total Return Swap

Volatility and Option Theory

• Introduction to Calls and Puts
• Calculating Historical or Realized Volatility
• Percentage Change versus Log Change
• Implied Volatility
• Moneyness and Skew
• Time Decay, Theta
• The Greeks
• Gamma vs Vega
• Pricing an Option
• Delta Hedging an Option
• VIX and VIX Futures

Convertible Bonds and Structured Notes

• Overview of Convertible Bonds
• Overview of Structured Notes
• Common Structured Note Structures
• Pricing considerations

Bond math is typically taught horribly with many “textbook experts” never having sold a bond before. This course is taught by actual bond traders using examples on a product by product basis. The goal is to teach bond math without being overly technical, focusing on the skills required on a day to day job. The Bloomberg Terminal is used to run the key calculations, with the instructor explaining the math behind the function. During the afternoon, we demystify Interest Rate and Credit Derivatives not only covering mechanics and conventions, but also how they are traded and hedged. We discuss proxy hedges, cost and speed of hedging to place participants in the seat of a trader.

Fixed Income Overview

• Overview of Fixed Income Products, decoding jargon and key terms
• Similarities and differences among key Fixed Income products
• Managing investor and borrower needs
• Understanding investor rationale across investor types and products

Money Markets

• Role of Money Markets, Money Market Investors
• Key Products: Bills, Discount Notes, Reverse Repos, Certificates of Deposit, Commercial Paper
• Money Market Bond Math: Daycount conventions, Yield versus Discounts, Settlement Conventions

Government Bonds

• Government Bond Overview and Conventions
• Auction process and On-the Run Bonds
• Bond Math: Calculating Coupons, Accrued Interest, Yield to Maturity, Duration
• Macaulay Duration versus Modified Duration ole of Money Markets, Money Market Investors

Corporate Bonds

• New Issue Overview
• Pricing Conventions – Spread to Treasuries
• DV01 and Risk
• Trading conventions, Mark-Ups
• Relative Value – T Spreads, G Spreads, I Spreads, Z Spreads, Asset Swap Spreads

LIBOR, Floating Rate Notes, Loan Conventions

• What Is LIBOR?
• Transition to SOFR
• Floating Rate Note Convention. Calculating Coupons
• Eurodollars, Eurodollar Futures, Packs and Bundles

Interest Rate Derivatives

• Overview of an Interest Rate Swap
• Calculating Cashflows
• Trading Conventions
• Proxy Hedging – How do you hedge an Interest Rate Swap?
• Discussion of Speed, Cost and Basis Risk
• Derivative Documentation (ISDA, CSA)
• Discounting Cash Flows

Credit Derivatives

• Focusing on what you need to know as a banker about CDS. A driver of investor sentiment and single name views. This section walks though how CDS actually works and how to decode the jargon
  • CDS Pricing and Mechanics
  • CDS Conventions, SNAC
  • CDS Indices, CDX and CDX HY
  • Credit Option Conventions
  • Correlation & Tranches