Derivatives

EM054U5P

Program
PGE
PGE 2A - FINANCE - COMPTABILITE
UE
Track Finance
Semester
B
Discipline
Finance
Contact hours
27 H
Number of spots
45
ECTS
5
Open to visitors
Yes
Language
Coordinator
Ali Özdakak


Pedagogical contribution of the course to the program

Développer un management à impact grâce aux connaissances et aux outils les plus récents dans les domaines du management

Developing a strategic and managerial vision in a complex, uncertain and changing environment
Evaluate sustainable managerial practices using managerial concepts and instruments as well as digital tools
Design solutions adapted to organizational problems by applying relevant methodologies

Pratiquer un management à impact dans un environnement multiculturel et international, porté par un "European mindset"

Communicate in a professional context in (foreign) languages, in writing and/or orally

Description

Derivates are actively traded on many exchanges around the world and used for several practical purposes. The derivatives market is huge and has become increasingly important in Finance over the past. The objective of this course is to understand how derivatives work, how they are used, and how they are priced. Students will learn the mechanics and properties of options, useful trading strategies as well as financial engineering techniques. Along with this, basic valuation methods will be introduced.

Teaching methods

Face-to-face

- Lectures
- Tutorials

In group

- Exercises

Interaction

- Discussions/debates

Others

No items in this list have been checked.

Learning objectives

Cognitive domain

Upon completion of this course, students should be able to
  • - (level 1) Define derivatives
  • - (level 1) Recognize arbitrage opportunities
  • - (level 1) Outline regulations of derivative markets
  • - (level 2) Give example(s) of derivatives use
  • - (level 2) Describe market mechanics
  • - (level 3) Employ and exploit trading stratgies on equity options
  • - (level 4) Distinguish trading strategies according to their objective (speculation, hedging...) with derivatives
  • - (level 5) Construct strategies based on the call-put parity

Affective domain

Upon completion of this course, students should be able to
None affective domain have been associated with this course yet

Outline

1. Introduction The nature of derivatives Terminology Use of derivatives examples Weather, energy and insurance derivatives 2. Mechanics of options markets Options positions and payoffs Commissions, margins Trading, regulations Underlying assets 3. Properties of stock options Types Price determinants Parity call-put Early exercise Impact of dividends 4. Trading strategies involving options Spreads (bull-bear-box-butterfly-calendar) Straddle-Strangle-Strip-Strap

No prerequisite has been provided

Knowledge in / Key concepts to master


Basic corporate finance knowledge

Teaching material

Mandatory tools for the course

- Computer
- Calculator

Documents in all formats

- Photocopies
- Worksheets

Moodle platform

- Upload of class documents
- Assessments

Software

No items in this list have been checked.

Additional electronic platforms

No items in this list have been checked.

Recommended reading


Options, Futures, and Other Derivatives 10th Edition, Copyright © John C. Hull 2017, or any other version


No reading material has been provided.

EM Research: Be sure to mobilize at least one resource

Textbooks, case studies, translated material, etc. can be entered
No reading material has been provided.

Assessment

List of assessment methods

Intermediate assessment / continuous assessment 1Class no. 4
Written / Individual / English / Weight : 50 %
This evaluation is used to measure LO1.1
Final evaluationExam week
Written / Individual / English / Weight : 50 %
This evaluation is used to measure LO1.3
No assessment methods have been attributed to this course yet.