Markets sales and trading: applied workshop

Market instruments

Distinguish cash products and derivative payoffs.

Compare cash flows and risks across four instruments.

Teaching example: Equity is ownership and a bond is debt; an option buyer has a right, not an obligation.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Quotes, spreads and orders

Understand trade direction and execution costs.

Calculate three spreads and identify the offer for a purchase.

Teaching example: Bid 99 and ask 101 means an immediate purchase is quoted at 101.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Macro indicators

Connect indicators, expectations and asset prices.

Separate actual, consensus and revisions in one macro release.

Teaching example: Beating consensus does not guarantee a rally; policy expectations and positioning matter.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Bond prices and rates

Relate fixed cash flows to market rates.

Compare a one-period bond under two rate scenarios.

Teaching example: A payment of 105 in one year at a 5% yield has a price of 100.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Position P&L and limits

Describe exposures with quantities, units and scenarios.

Calculate position P&L in up and down scenarios.

Teaching example: Ten shares falling from 100 to 95 lose 50 before fees.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

A market view

Combine observation, catalysts and counter-evidence.

Write a view with facts, assumptions, catalysts and invalidation.

Teaching example: State that a contrary inflation path would trigger a reassessment.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Client explanation and trade review

Explain risk and return without promising outcomes.

Prepare a 90-second market discussion and review a simulated trade.

Teaching example: Record the entry rationale, outcome, costs and sources of judgment error.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Worked example · fictional

From a problem to inspectable work

Synthetic bond: modified duration 4, parallel yield rise 50 basis points, price 100; use first-order duration only, excluding convexity and income.

1. ΔP/P ≈ −Dmod × Δy = −4 × 0.005 = −0.02, or −2%. Convert basis points to decimals.
2. Further judgment: The curve moves nonparallel. Is this number sufficient?
3. Add key-rate, convexity and liquidity scenarios and state approximation limits

Deliver market view and simulated trade review: the calculation reference is -2; the recommendation must respect Add key-rate, convexity and liquidity scenarios and state approximation limits. Separate numbers, inference and unknowns.

Failure case and repair

In Bond prices and rates, copy tool output without definitions, then retain the conclusion when asked: The curve moves nonparallel. Is this number sufficient?

Even a result of -2 does not explain when Add key-rate, convexity and liquidity scenarios and state approximation limits is supported.

ΔP/P ≈ −Dmod × Δy = −4 × 0.005 = −0.02, or −2%. Convert basis points to decimals. Then test assumptions in A market view.