Course Description
This course is an introduction to the trading and application of options and futures related to commodity, stock and fixed income products in the financial market. It also introduces the bias and psychology patterns investors demonstrate in their trading. Prerequisite: Grade of C or better in FIN 315.
Syllabus
Student Learning Outcomes, Goals, Objectives:
Students successfully completing this course will be able to:
- Distinguish the mechanics of various futures contracts and their related trading strategies.
- Describe the trades by hedge funds.
- Summarize the mechanics of options contracts and their corresponding trading strategies.
- Apply the binomial tree model and the Black-Scholes model to price options.
- Analyze the impact of behavioral biases and psychology on trading.
Course Grading Information:
| Activity/Performance Measure | Percentage/Points |
|---|---|
| Simulation | 9% |
| Homework | 30% |
| Discussion | 7% |
| Exam1 | 18% |
| Exam2 | 18% |
| Exam3 | 18% |
There will be 3 exams. They are equal-weighted, and their total is 54% of your grades. The exam consists mostly of multiple-choice questions. The final is not cumulative. Exams will be held in a lockdown browser with camera monitoring in Canvas. It is timed for 75 minutes. Review questions will be provided.
The grading Scale will be as follows:
Grading Scale
| Percentage | Letter Grade |
|---|---|
| 92%-100% | A |
| 90%-91.9% | A- |
| 88%-89.9% | B+ |
| 82%-87.9% | B |
| 80%-81.9% | B- |
| 78%-79.9% | C+ |
| 72%-77.9% | C |
| 70%-71.9% | C- |
| 68%-69.9% | D+ |
| 62%-67.9% | D |
| 60%-61.9% | D- |
| Below 60% | F |
Note that a grade of Ds is not an option for a graduate student according to the policy of the graduate school.
Attendance/Participation:
Optional team session will be held about every two weeks, if there is demand. Links will be sent during the semester. Tentative time is Tuesday, 6:00 to 7:00 PM.
Course Materials Purchased by the Students:
Fundamentals of Options, Futures and Other Derivatives, John Hull, 9th edition, 2017, Pearson Prentice Hall. Older and newer editions of the books are fine.
Scholarly Perspectives
This course engages diverse scholarly perspectives to develop critical thinking, analysis, and debate and inclusion of a reading does not imply endorsement.