Complete the FX Spot & Derivatives course!

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Course Summary

Warren Buffet famously said that "Derivatives are financial weapons of mass destruction." Despite the warning implied in this quote, in the broadest context, a weapon can be defined as any instrument used for defense. As it relates to foreign exchange, currency derivatives are hedge instruments, or weapons, multinational corporations can use to defend against currency risk, which is the change in value of one currency against another.

The most common currency derivatives are forward contracts, vanilla options, and option combinations. To defend against and mitigate currency risk, it is critical for companies to understand the fundamentals of using currency derivatives. At the highest level, currency derivatives are financial contracts between two parties whose value is derived from the exchange rate of one or more underlying currencies. In order to effectively use currency derivatives to achieve FX risk management objectives, firms must recognize their differences and similarities and how they work in practice.

It is clear that world-class multinational corporations know that foreign exchange risk management involves mitigating currency risk to an acceptable level by understanding when and how to hedge using financial instruments. This course will deconstruct common derivative instruments such as forward contracts, option contracts, and zero cost collars, and help you recognize their differences and similarities in order to select an optimal hedge instrument. Upon completion of this program, you will walk away with a comparative analysis of the different types of derivative instruments that can be employed to help mitigate currency risk when transacting abroad.

Questions to Consider
  • Are you curious what derivative instrument is used overwhelmingly in practice?
  • Would you like to observe how different variables directly impact the value of a foreign exchange option?
  • Have you wondered why zero cost collars do not require an upfront premium?
  • Do you want to know how Milton Friedman’s book titled "There's No Such Thing as a Free Lunch" applies to currency derivatives?
  • Can you visualize the economics and accounting impact of forwards, options, and collars?
  • All of these questions are covered in this FX Spot & Derivatives course using real-world interactive examples.
Learning Objectives
  1. Explore the concept of forward contracts, and recognize their forward point premium or discount and symmetrical payoff profile.
  2. Explore the concept of option contracts, and recognize their pricing variables and asymmetrical payoff profile.
  3. Explore the concept of option combinations, and recognize how structures such as a zero cost collar create a unique payoff profile.
Additional Information

Presenter: Evan Mahoney, CPA
Sponsor: FX Initiative, LLC
Last Review Date: September 2024
Course Expiration: 1 Year from Enrollment Date
Duration: 1 Hour
CPE Credits: 1 CPE Credit
Program Level: Basic
Prerequisites: None
Advanced Preparation: None
Delivery Method: QAS Online Self Study
Field of Study: Management Services

To contact us about this program, including complaint, refund, and cancellation policy information, please email support@fxinitiative.com or call (312) 566-7475.


FX Initiative, LLC (Sponsor ID#112915) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have the final authority on the acceptance of individual courses for CPE credit. Concerns regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org