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- Partner : KnowledgeOne - Concordia
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- Location : Online.
Derivatives explains basic derivatives securities, derivatives markets and the use of options in risk management. Each module teaches concepts through real-life examples so you can understand the role that derivatives plays in managing financial risk and creating synthetic exposures to asset classes. Interactive quizzes have been designed to help you reflect on what you learned and put your knowledge in practice.
Modules in this course:
Module 1: Derivative Markets and Instruments
This module offers a big picture overview of the derivatives markets along with the main purposes and criticisms of this evolving market which gives birth to innovative structures and where financial engineering finds its expression. The basic characteristics of forward contracts, futures contracts, options (calls and puts), and swaps are discussed and the distinction between exchange-traded and over-the-counter derivatives is explained.
Module 2: Forward Markets and Contracts
This module discusses the basic features of over-the counter forwards (delivery-settlement and termination alternatives) and their use from dealers and end-users. The most common types of forward structures are described: equity forwards, currency forwards, and bond forwards. Lessons also cover Forward Rate Agreement (FRAs) characteristics and calculations.
Module 3: Futures Markets and Contracts
This module discusses the basic features of exchange-traded futures and their main differences with over-the-counter forwards. The most common underlying assets of futures are described: Treasury bills, Eurodollars, Treasury bonds, stock indices, and currencies. Lessons also cover the role of initial margin, maintenance margin, variation margin, and settlement in futures trading.
Module 4: Option Markets and Contracts
This module covers basic concepts of call and puts. Distinguishing between American and European options and exchange-traded and over-the-counter options. Understanding the concept of the moneyness of an option, its intrinsic value and option payoff diagrams. Determining the boundaries of various option values and understanding qualitatively how option prices are affected by the exercise price, the time to maturity, interest rates, and volatility. Put-Call parity is discussed thoroughly and its application in identifying trading opportunities.
Module 5: Swap Markets and Contracts
The swap market is one the largest over the counter derivative products that can be linked to a variety of indices, financial instruments or benchmark rates. This module describes the characteristics of swap contracts, their settlement and termination procedures. Payment calculations are described for the most common types of swaps (plain vanilla interest rate swaps, currency swaps, and equity swaps).
Module 6: Risk Management Applications of Option Strategies
This module discusses quantitative and graphic coverage of value at expiration and P/L (profit and loss) of buying or selling calls and/or puts thoroughly. Calculations of the maximum profit, maximum loss, and breakeven underlying price at expiration are covered. The same graphs and boundaries are derived for a covered call strategy and a protective put strategy. Lessons explain the use of these option strategies and reveal the embedded investment view when implementing these strategies.
All course materials and assessments are online. Each course is available 24 hours a day, 7 days a week. Courses (and the modules that make up the courses) can be accessed from anywhere around the world with an Internet connection, and without requiring any software to download onto your computer. Courses can be accessed for a duration of three months, giving you plenty of time to review, study and not only test your knowledge, but improve your grades. Course materials are offered in audio and print format and can be reviewed in any order enabling you to have complete control of your learning process.
The credit hours listed in each course description page serve as an approximation of the total learning time required to complete a module or a course. This includes watching the video lectures, completing the readings and exercises, and going through other assigned course materials. However, it is understood that this value is an approximation, since it will vary for each individual learner. Once registration is complete, the access given to a module or a course is three months, which gives plenty of time to continue reviewing the study materials or to improve grades.