This course is designed for senior undergraduate students to understand and price the basic derivative instruments, with major emphasis on options and futures. The course will start by introducing basic operations of these markets. Students will then apply the knowledge of mathematics of finance to the pricing of derivatives such as options, futures, and swaps. Discussions will then be extended to concepts of risk management such as Value at Risk and the Greeks of derivatives. General topics covered are pricing models, investment strategies and risk management involving the derivatives.

CILO-1: Trade various derivative instruments. CILO-2: Price basic derivative instruments, with major emphasis on options and futures. CILO-3: Apply the knowledge of mathematics of finance to the valuation of derivatives such as options, futures, and swaps. CILO-4: Critically evaluate investment strategies and quantify the risks involving derivatives. CILO-5: Hedge using various derivative instruments.