fbpx IFP pupils study FX and derivatives - Haileybury

IFP pupils study FX and derivatives

Scott Woods, one of the Sixth Form pupils on the International Finance Programme, continues his diary about the course.

Week 8

The first session of the New Year began with us having a very distinguished guest in the form of Paul Chappell. He had been head of FX at the Bank Of America for several years and has now started a hedge fund in Welwyn Garden City, called C-View, which since 2001 has tallied a total of £600 million in investments.

Paul gave us a 45-minute talk, introducing FX and various strategies used in the FX market. He explained how events affect currencies and how he takes advantage of this to generate profits. He explained that his company handled more short-term investors rather than hanging around for many years and hoping for a vast profit in the long term.

Overall, it was an excellent talk, greatly appreciated by all the IFP students and teachers alike and it was an excellent introduction into the world FX markets. I would like to thank Mr Chappell for taking time out of his schedule to come and visit Haileybury and give an excellent talk. Thanks also must go to Mr Church and Mr Cohen for organising the event.

The second half of the session was spent learning more material from the course. We began by finishing our section on bonds, by looking at Zero Coupon Bonds and Convertible Bonds. We then studied the money market and what that entailed, as well as looking at treasury bills, commercial paper and certificate of deposit.

We then began to study derivatives, the generic name give to a range of instruments, of which futures and options are the most straightforward. We looked at the definition of a future.

Week 9

Week 9 was a shortened session due to an AS talk. When we got started we went back again to working on the material for the course. We continued to look at derivatives and then looked at a call option (buy) versus a put option (sell). We then learnt about Value and Moneyness and In and Out of the money options (ITM and OTM). This then concluded the chapter on derivatives and brought us into Chapter 4, Financial Products.

We looked at a massive variety of things in this chapter: deposits, loans, the definition of AER (Annual Equivalent Rate), what a mortgage is and what types of mortgages there are (repayment mortgage and interest-only mortgages), alternative investments, interest options, life assurance, term assurance and pensions and looked at state pension schemes and occupational pension schemes.