PRACTITIONER LIBRARY

Applied Market Concepts

Short practical guides to the instruments, concepts and portfolio engineering techniques used in institutional markets and treasury.

THE PRACTITIONER’S REFERENCE DESK

01

Each entry explains what the instrument or concept is, why it exists, how it works and what matters when applying it in practice.

02

The aim is to get beyond the textbook definition and into the decisions, trade-offs and practical considerations that matter when using it.

03

The detail that sits between the textbook and the desk, with no house view.

Browse the Library

Counterparty Risk Applied

A profitable hedge is worthless if nobody is left to pay you.

FX Instrument Suite Applied

Five instruments. One market. Completely different obligations.

FX Forwards Applied

They remove uncertainty. They also remove flexibility.

Bond Forwards Applied

Most institutions extend duration with swaps. Sometimes the better answer is to lock the bond instead.

Equity TRS Applied

Own the upside. Skip the balance sheet. Just know what you are paying for the privilege.

Contingent FX Forwards Applied

The FX forward that only fires if the deal closes.

Collateral Swaps Applied

You do not have to sell the asset to raise liquidity. You just need access to someone else’s balance sheet.

Inflation Swaps Applied

You hedged inflation. Just not your inflation.

Portable Alpha Applied

The premise is elegant. The execution systematically ignores three things that change the economics entirely.

Quantitative Investment Strategies Applied

You think you are buying a strategy. You are also buying a structural dependency on the dealer.

Monetising Derivative Hedges Applied

Your hedge worked. You still made nothing. Here’s why.

Tail Hedges Applied

Diversification fails when you need it most. Convexity doesn’t.

Convexity Applied – Budgeting, Governance and Monetisation

Most portfolios have hedges. Very few have a convexity budget. The difference is not semantic.

Index CDS Applied

The premium wasn’t the biggest cost. The basis was.

Swaptions Applied

An IRS locks the rate. A swaption locks the decision.

Non-Deliverable Forwards Applied

EM FX hedging looks like G10 FX hedging. It isn’t.

Volatility Applied – Buying, Selling and Mispricing It

Volatility. The asset class most institutions trade without recognising it.

Cross Currency Swaps Applied

You removed the headline FX risk. You kept the basis, the MTM, and the collateral call nobody modelled.

Interest Rate Swaps Applied

Most interest rate swap problems have nothing to do with interest rates.

Options Applied – What You’re Really Trading

Nobody trades options. They trade exposures. The instrument is the vehicle.

FX Swaps Applied

FX swaps. The instrument every treasurer uses and almost nobody fully prices.

APPLY THE CONCEPTS TO YOUR PORTFOLIO

Understanding the instrument is the first step. Applying it inside a portfolio, balance sheet or treasury is where governance, liquidity, collateral, accounting and market structure come in.

If you’re reviewing an existing programme, building a new one or assessing a new strategy, Para Bellum can help work through how these concepts apply to your portfolio, balance sheet or treasury.

Have a requirement, a decision to make or something you want to do better?

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