FX Management in Corporate Treasury - Part 1 - Fundamentals

Name: FX Management in Corporate Treasury - Part 1 - Fundamentals
Rating: 4.7 (110 reviews)

Part 1 of a 2-Part Series for Foreign Exchange Management in Corporate Treasury

Created byMichael Lipinski

Last updated 12/2025

English

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What you'll learn

Learn how the FX Market works and understand its participants
How to apply the Risk Management Cycle in Order to identify and Asses FX Risk in your company
Understand the role of the Tresasurer in FX Management
Understand how to read FX Prices and their quotations
Learn how to calculate Cross Rates
Understand different instruments of FX Spot, FX Forward, FX Swaps and FX Options
Unterstand the pricing of FX Forwards and FX Swaps
Understand "Big Figures" & "Pips"
Gain deeper insights into the Nature of FX options

Course content

4 sections • 47 lectures • 6h 49m total length

Module1: Why FX Management is relevant to international organizations9:34
Master how currency risks shape corporate outcomes by building a foreign exchange framework, quantifying exposures, and applying spot and forward transactions and options to protect value.
FX Volatility in action4:20
Case Example - A Supply Contract leads to FX Exposure6:37
Look at how one specific supply contract may lead to FX risk for a producer of smartphones and how we can calculate the profit or the loss of that contract.
There is more than one FX Risk!8:00
Learn about the 8 main types of FX Risks and what makes them unique.
Intermediary Quiz
Two types of Treasury with different goals3:48
Learn about the two main principles of FX Management in Corporate Treasury. One of them is commonly spread, the other one rarely encountered.
How can you identify and asses FX Risk?8:32
Identify and quantify FX risks through a five-stage, circular risk management cycle—identify, quantify, analyze, manage, monitor. Balance security and flexibility with hedging, monitoring, and governance.
The Risk Management Cycle in Action8:04
Modul 1 Quiz and Summary10:30

Introduction to Module 2: FX Market Basics1:59
Explore the fundamentals of the fx market, learn who trades currencies, how prices are set, and how bid-ask logic and cross rates drive hedging and treasury decisions.
What is the FX Market?8:33
Who Are the Main Players in the FX Market?7:40
This lecture shows how FX market participants—central banks, commercial banks, corporates, hedge funds, and retail investors—access the market through banks, forming a two-tier system with interbank pricing and client rates.
The Major Currencies in the FX Market8:43
Discover how major currencies like euro-dollar and dollar-yen offer deep liquidity, tight spreads, and better market access, while minors such as euro-Turkish lira bring higher volatility and wider quotes.
Intermediary Quiz
Overview of FX Market Instruments5:54
OTC vs. Exchange-Traded FX9:20
Explore the difference between OTC and exchange-traded FX, highlighting bilateral customization and counterparty risk in OTC, versus standardized contracts with central clearing and lower risk on the exchange.
Base Currency, Quote Currency, Big Figure & Pips19:28
Understand base currency and counter currency definitions, and how quotes express value in forex. Distinguish bid, ask, spread, big figures, pips, and market maker versus user roles.
How an FX Trade Works + Reading Bid & Ask Prices9:16
Understand fx trading involves two currencies, with the market user buying the base currency on the ask side while comparing bid and ask quotes to minimize USD outlay for euros.
Understanding Bid & Ask Prices – CAD/CHF Example10:26
Direct vs. Indirect Quotations12:11
Intermediary Quiz
Converting Direct and Indirect Quotations11:04
Learn how to convert direct and indirect FX quotations by using reciprocals and correctly flipping bid and ask to preserve the spread, preventing bid-ask inversion and arbitrage.
Cross Rate Calculations – Basic to Advanced16:09
Master two essential cross rate calculations: multiply bid rates for simple cross calculations, and invert when one currency is the base in both quotes, then multiply bid and ask accordingly.
How FX Prices Are Determined5:25
fx prices arise from a decentralized interbank market, where thousands of trades and centralized order books of bids and asks shape the live rate.
Module 2: Quiz & Wrap-Up8:39
Apply core fx concepts by interpreting bid and ask quotes, spreads, and direct vs indirect quotations, then compute cross rates for corporate treasury in otc markets.

Module 3: Introduction1:47
How FX Spots work and when to Use them14:53
Explore spot transactions, fixing today's exchange rate for immediate currency delivery with two-day settlement. See how spot serves as an execution tool for current cash flows, not hedging future risks.
FX Forwards Explained7:03
Explains fx forwards as a risk-management tool in corporate treasury. Demonstrates fixing a forward rate today for a six-month settlement of 1 million USD against euros, yielding €909,000.
How FX Forwards Shape Your Risk and Opportunity5:51
Explore how fx forwards fix a rate to eliminate risk and influence protection and opportunity. The 1.1 forward yields €909,000 versus €847,000 at spot, showing outcomes depend on market moves.
FX Spots vs. FX Forwards – When to Use Which7:09
What is an FX Swap?11:07
Discover how an fx swap uses spot and forward legs to bridge a euro surplus and a three-month dollar need, enabling immediate payment and future settlement.
Understanding FX Swaps in Practice7:03
Bridge a currency gap with an fx swap as a liquidity management tool, turning a euro surplus into us dollar for three months, without hedging.
FX Swaps vs. FX Spots & Forwards – Typical Use Cases5:57
FX swaps act as a liquidity tool to bridge short-term currency gaps and reconcile accounts. They are cheaper than two trades, but add complexity and are not true hedges.
Intermediary Quiz
Covered Interest Parity and the Role of FX Swap Points10:58
Explore how FX swap points mirror interest rate differentials between currencies, align swap and money markets to prevent arbitrage, and lay groundwork for forward pricing under covered interest rate parity.
How to Calculate FX Forward Rates9:26
Calculate fx forward rates using covered interest rate parity, starting from spot rate and adjusting for interest rate differentials and day count conventions; learn discount and premium with bid-ask principles.
How to Calculate FX Swap Points8:47
Learn to calculate fx swap points as the difference between forward and spot rates by adjusting the spot with interest rate differentials, including bid and ask considerations.
Intermediary Questions
How Interest Rate Differentials Drive FX Swap Points11:09
Explore how interest rate differentials translate into fx swap points using a 90-day tenor, revealing when euro-dollar forwards trade at a premium or discount.
How to Calculate the All‑In Cost of Hedging6:05
Calculate forward rates by adding swap points to spot rates and evaluate hedging costs as a percentage of spot across currencies, highlighting premium and discount regimes.
Module 3: Quiz4:54
Explore how swap points reflect interest rate differentials and drive forward pricing, including when forwards trade at a premium or discount, and how forward contracts fix future fx rates.
Module 3: Wrap‑Up and Key Takeaways4:29
Review spot, forwards, and swaps: spot for immediate needs, forwards for hedging forecasted cash flows, and swaps to bridge liquidity, using interest-rate differentials.

Module 4: Introduction to FX Options2:04
Learn the fundamentals of fx options, including definitions, key terminology, american versus european styles, payoff profiles, and moneyness, to manage currency risk in corporate treasury and communicate with teams.
What Are FX Options? Definition and Simple Example10:01
An fx option gives the buyer the right, not the obligation, to buy one currency and sell another at a predetermined strike for a premium, providing protection with flexibility.
FX Options Terminology and American vs. European Styles9:13
Define fx options terminology, including long and short, call and put, strike, notional, premium, expiry, and settlement, and contrast American versus European styles.
EUR/SEK FX Option in Action11:26
Demonstrate how a euro Swedish krona fx option hedges a €1 million exposure, using a 1020 strike and a 100,000 sek premium, with expiry on March 8, 2022.
EUR/SEK FX Option: Payoff Chart6:46
Illustrates the EUR/SEK fx option payoff curve, showing downside capped by the premium and profit realized when spot rises above the strike, yielding about 530,000 SEK.
EUR/SEK FX Option: Calculating the Break-Even9:47
Learn to calculate the FX option break-even by converting premium to pips and adding to the strike, illustrated with EUR/SEK and USD/EUR examples.
Intermediary Questions
Moneyness of an FX Option Explained16:02
Describe the three moneyness states for FX options: in the money, at the money, and out of the money, and show how spot versus forward rate determines intrinsic value today.
The Four Basic Profit and Loss Profiles14:50
Demonstrate the four fx option profit and loss profiles, including long and short calls and puts, driven by premium, strike, and market moves, with break-even and mirrored risk concepts.
FX Options vs. FX Forwards and FX Swaps – When to Use Which5:45
Explore the use cases of FX options, compare them with forwards and swaps, and learn how strike rate, premium, and risk limits shape tailored hedging strategies.
Module 4: Quiz and Wrap-Up13:01
Review the fundamentals of fx options, including holder and writer roles, premium, strike, moneyness, and payoff profiles, with a wrap-up and quiz.

Requirements

This course is designed for both beginners and advanced professionals who want to unterstand the basics of FX Management
No pre requisits needed, you will learn by the scratch

Description

Master FX Management in Corporate Treasury

Transform currency volatility into strategic advantage with this comprehensive Udemy course, crafted by my 20+ years treasury insights.

Drawing from real-world crises like the 2015 SNB shock, discover how top treasuries shield cash flows, earnings, and competitiveness—without speculation.

Course Structure

Part 1: Fundamentals:

Module 1: Foundations – FX risk types (transaction, translation, economic), management cycle, treasurer's role.
Module 2: Basics of the FX Market – Market Infrastructure, Conventions, Pricing, Calculations
Module 3: FX Instruments: Spots, Forwards, Swaps – Spot and Forward Transactions, FX Swaps , Forward Pricing
Module 4: FX Option Basics – Put and Call, Terminology, Payoff Profiles, Break-Even Calculation

Part 2: Advanced (Not part of this course - will be released Dec 25 / Jan 26)

Module 5: FX Options Advanced – Pricing Models, Option Greeks, Intrinsic vs. Extrinsic Value
Module 6: FX Option Structures – Structured Products, Smile Curve, Risk Reversals
Module 7: FX Operating Framework – Front-, Middle-, Back-Office, Segregation of Duties, Telephone Dealing, Budget Rate Setting, Hedge Accounting
Module 8: FX Hedging Strategies – Micro vs. Macro, Static vs. Rolling, Layered vs. Tapered, Natural Hedge, Case Study: FX Loss Bearing Capacity
Module 9: My Top 5 Recommendations from 20+ Years in FXY Management
Module 10: Course Wrap-Up

What You'll Gain

Master Risk Control: Identify, quantify, and analyze FX exposures (transaction, translation, economic) using the full risk management cycle—turning volatility into predictable outcomes.
Instrument Expertise: Deploy spot, forwards, swaps for liquidity/hedging; command options (Greeks, structures like risk reversals) for flexible protection with upside potential.
Proven Strategies: Implement operating frameworks (front/middle/back office, hedge accounting), advanced hedging (micro/macro, layered/tapered), and real case studies for crisis-ready decisions.
Treasury Edge: Apply 20+ years of senior insights—top 5 rules, effectiveness testing, dollar offset—to elevate from tactical trader to strategic leader, safeguarding cash flows and earnings.Elevate from reactive trading to proactive mastery—enroll now and secure your company's financial edge.

Who this course is for:

This course is designed for Junior Treasurers, Accountants, Controllers and students looking to enhance their understanding of FX Management in corporate treasury.
Young professionals, who want to understand how FX management is done in a corprate environment
Accountants who have to work with Corporate Treasurers
Professionals involved in international trade who need to comprehend FX instruments like spot, forwards, swaps, and options.
Treasurers who want to refresh their base understanding of FX Management

FX Management in Corporate Treasury - Part 1 - Fundamentals

What you'll learn

Explore related topics

Course content

Introduction to FX Management8 lectures • 59min

How the FX Market works and FX Market Conventions14 lectures • 2hr 15min

From FX Spot to FX Forward and Understanding Forward Pricing15 lectures • 1hr 57min

Basics of FX Options10 lectures • 1hr 39min

Requirements

Description

Who this course is for: