PROPERTY DERIVATIVES:
Types, Usage, Risks
Course Outline
Property Derivatives discusses what is unique about derivatives where property is the underlying asset, and explores the many ways to use and misuse these derivatives. The course covers current housing futures and options, property index swaps and possible future developments.
Who The Course is For
- Property investors
- Property occupiers and valuers
- Investment bankers
- Traders
- Risk managers, regulators, auditors and anyone else who has to comply with solvency II (or its equivalent)
- Property accountants
- House builders
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Prior Knowledge:
The course assumes basic knowledge of property investments and vanilla derivatives and delegates should be comfortable with Excel.
This
program is eligible for 16 Continuing Education credit hours from the
CFA Institute. If you are a CFA Institute member, CE credit for your participation
in this program will be automatically recorded in your CE Diary.
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Day One
Introduction and Course Outline
Types of Derivatives
- Futures
- Forwards
- Swaps
- Options (traded, not traded)
- LTIP arrangements
- Real or embedded options
Workshop: Payoff diagrams (Excel)
Property Performance Benchmarks
- Direct vs indirect indices
- Measurement issues
- Un/geared property
Current developments
- US
- UK
- Europe
- Asia
Workshop: Derivative Valuation (Excel)
Day Two
Housing Futures & Options
- Development history
- US housing futures
- UK house indices
- Swiss house indices and options
Workshop: Derivative Valuation (Excel)
Long-Term Incentive Plans for Property Managers
- Types of LTIP
- Performance criteria and rewards
- Valuing and revaluing plan arrangements
Dangers in Property Derivatives
- Benchmarking
- Volatility of appraisal indices
- "Storage" and "Short-selling" problems
- Index revisions after derivative settlements
Workshop: Derivative Sensitivites (Excel)
Using and Mis-using Property Derivatives
Note: Course outline is subject to change as this is still a developing topic.
