Derivatives Course

Pricing, market structure, hedging, trading strategies, arbitrage relationships, and applications to corporate securities for options and futures contracts, swaps, and other derivative instruments. Additional work required of graduate students.

Video Transcript

This course is about derivatives. It’s an introduction to derivatives. In other words, we’re not going to cover the whole gamut of derivatives that you might find throughout the entire marketplace, but we’re going to talk about the basic ones. We’re going to talk about forwards and futures, swaps, call and put options, and basically how we can use them in order to cover a number of different things that traders and market participants are actively involved in: hedging, speculation, and seeking arbitrage opportunities. instruments.

Now, you might say what qualifies me to teach a course like this? My name is Tom Barkley, and I have had some experience working with derivatives, particularly in the energy field. Before getting my PhD and becoming a professor, I worked for a big company called Enron. Most of you have heard of them. They were a large Fortune 500 Company. They were actually in the top 10 in the Fortune list at one point and sought to become the world’s leading energy marketer. They had a number of years in which they were classified as the most innovative company in the world by Forbes. One of the things that Enron did was they actually did a number of transactions with counterparties using derivative products in the energy market. These included the ones that we’ll talk about—futures contracts, forward contracts, swaps, options—but then they also had a number of exotic types of options that we will not cover in this course. instruments.

So, at the end of the course I hope that you will be familiar with what each of these different types of derivatives can do for you, how you can use them at a corporate level if you’re working in the finance sector of a large corporation, or even how you can apply this to your own personal finances. You are able to open accounts these days at a personal level for futures trading and options trading, but I will give you a forewarning, that these things are risky instruments and this is why companies and individuals have lost a lot of money, because they’ve taken the wrong bet, made the wrong decision when it came to investing in derivatives. But let’s get into the course and get stuck into finding out more about these interesting animals that we find in the zoo of financial instruments.