FX TARNs (Target Accrual Redemption Notes) saw a reemergence of activity towards the end of 2012 and the beginning of 2013, with increased volumes in Europe, Asia, and the Middle East. Traded mostly by corporations and investors, they are often seen as a low cost enhanced hedge for currency exposures.

However, TARNs have been the topic of hot debate since the financial crisis. Viewed as a contributor to corporate bankruptcies and financial contagion in many emerging markets during the financial crisis, TARNs have a complex risk-reward profile that was poorly understood by – and inappropriate for – many buyers of the product pre-crisis. This leads to the question – should a company ever hedge FX rates using FX TARNs?

In this webinar from Numerix and partner Dion Global Solutions, recorded on March 6th 2012, Udi Sela, 20-year FX veteran and Numerix Vice President of Client Solutions, took a deep dive into FX TARNs, to debate the role FX TARNs can play – or not – in FX hedging strategies.

This webinar covered:

  • An Introduction to TARNs
    • TARNs’ Role in the Financial Crisis
    • Their Reemergence Post-Crisis
  • Description of FX TARNs
    • Comparison to Participating Forwards
    • Typical Features
    • Examples
    • Sample Payoff Scenarios
  • Pros and Cons
    • Typical Usage
    • Understanding the Risks
  • Risk Management
To view the webinar replay, just register on the right side of this page.

Featured Speakers
Udi Sela, Vice President, Client Solutions Group
Udi Sela has worked in the Foreign Exchange (FX) derivatives markets for 20 years. A senior derivatives trader and trading manager at Citibank and JPMorgan, he has developed expertise in derivatives spanning both vanilla and complex FX options. For the last nine years, Sela has led product development and pre-sales functions within a range of financial software vendors.

Robert Gray, Sales, Dion Global Solutions
Robert Gray, Sales for dfferentia in Europe, has more than 20 years’ experience in the area of derivatives front office sales. An expert in financial services, with a wealth of experience in the derivatives market, he has worked across the industry with companies including S&P, Tullett Prebon, Cantor Fitzgerald and Saxo Bank.

Robert’s background has given him an unrivalled understanding of semantics and technology on the trading floor. Spearheading the European roll out of dfferentia, Dion’s the multi-asset class pricing, valuation and risk management solution for OTC derivatives, he has clear understanding of both the challenges and opportunities currently facing the industry.

 

Moderator: Jim Jockle, Chief Marketing Officer
Mr. Jockle leads the company's global marketing efforts, spanning a diverse set of solutions and audiences. He oversees integrated marketing communications to customers in the largest global financial markets and to the Numerix partner network through the company's branding, electronic marketing, research, events, public relations, advertising and relationship marketing.

Prior to joining Numerix, he served as Managing Director of Global Marketing and Communications for Fitch Ratings. During his tenure at Fitch, Mr. Jockle built the firm’s public relations program, oversaw investor relations and led marketing and communications plans for several acquisitions. He also oversaw the brand development of a new company dedicated to the enhancement of credit derivative and structured-credit ratings, products and services. Prior to Fitch, Mr. Jockle was a member of the communications team at Moody's Investors Service.

 
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