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Derivatives

Course Description: This course covers financial derivatives markets and contracts, including futures, forwards, options, and swaps. Students will develop a comprehensive understanding of how futures and options markets function, interest rates, and the pricing of forward and futures contracts, including interest rate futures. The course examines hedging strategies using futures, swap structures, and the characteristics of options, along with trading strategies involving options. Students will also be introduced to option pricing models, including the binomial model and the Black-Scholes-Merton model, and risk sensitivity analysis through the Greek indicators. Additionally, the course covers employee stock options, options on stock indices, currencies, and futures.

Credit hours: 3

Objectives of the course :

Upon completion of this course, the student will be able to:
Describe the operating mechanisms of futures and options markets, interest rates, and the characteristics and pricing of forward contracts, futures contracts, and swap contracts.
Implement hedging strategies using futures contracts and trading strategies using options to manage financial risk.
 Applying option pricing models, including the binomial model and the Black-Scholes-Merton model, and analyzing risk sensitivities using the Greek indicators.
Evaluate the use of employee stock options, stock index options, currencies, and futures contracts.

Course outputs :

Knowledge and understanding:
Differentiates between derivative instruments, including the working mechanisms of futures and options, interest rates, and the pricing of forward and futures contracts, interest rate futures, and swap contracts.
Discusses option characteristics, trading strategies, and option pricing using the binomial model and the Black-Scholes-Merton model, and the role of the Greek indicators in measuring risk sensitivities.
Evaluates hedging strategies using futures contracts, employee stock options, options on stock indices, currencies, and futures contracts, with the goal of assessing derivative pricing and investment opportunities.
2) Skills:
Applies problem-solving and critical thinking skills to solve complex and advanced problems in the field of financial derivatives.
 Clearly and effectively communicate advanced information and findings related to financial derivatives in writing.
3) Values, Responsibility, and Autonomy:
Analyzes professional and ethical standards for resolving dilemmas in the field of financial derivatives

Additional information:

Last updated: 2026-04-26