INTERNATIONAL BURCH UNIVERSITY
Faculty of Economics and Social Sciences
Department of Banking and Finance
2015-2016

SYLLABUS
Code Name Level Year Semester
BAF 210 Introduction to Derivatives and Trading Techniques Undergraduate 3 Spring
Status Number of ECTS Credits Class Hours Per Week Total Hours Per Semester Language
5 0

Instructor Assistant Coordinator
Sanel Halilbegović, Assist. Prof. Dr. Prof. Dr. Sanel Halilbegovic Sanel Halilbegović, Assist. Prof. Dr.
[email protected] [email protected] no email

This course introduces students to derivative instruments, which are contracts whose values derive from prices of underlying assets and goods such as equities, currencies, debt, and commodities. The main focus is on the valuation and application of the principal derivative building blocks including futures and forward contracts, options, and swaps.

COURSE OBJECTIVE
To give students an understanding of issues pertaining to pricing and hedging with options on individual stocks and indexes, to examine forwards and futures contracts for equity indices, commodities, and currencies, and to analyze second generation derivative products such as interest rates and the management of credit risks.

COURSE CONTENT
Week
Topic
  1. Introductory Chapter
  2. Structure of Options Markets
  3. Principles of Options Pricing
  4. Options pricing - The Binomial Model
  5. The Black Scholes Model
  6. Quizz
  7. Midterm
  8. Basic Options Strategies
  9. Advanced Option Strategies
  10. The Structure of Forward and Futures Markets
  11. Principles of Pricing Forwards, Futures, and Options on Futures
  12. Quizz
  13. Swaps
  14. Pre Final Preparation
  15. Final Exam

LABORATORY/PRACTICE PLAN
Week
Topic

    TEACHING/ASSESSMENT
    Description
    • Interactive Lectures
    • Practical Sessions
    • Excersises
    • Discussions and group work
    • Field trips
    • Problem solving
    • Assignments
    • Case Studies
    Description (%)
    Method Quantity Percentage (%)
    Quiz25
    Midterm Exam(s)125
    Presentation120
    Final Exam145
    Total: 95
    Learning outcomes
    • 1. Discuss and explain in detail financial instruments such as options, futures, swaps and other derivative securities
    • 2. Describe and understand the economic environment in which such instruments operate
    • 3. Explain futures arbitragre strategies
    • 4. Develop and employ theoretical valuation methods to price these financial instruments
    • 5. Apply these instruments in managing the risk of investing and hedging activity at the individual and the corporate level
    TEXTBOOK(S)
    • An Introduction to Derivatives and Risk Management, Chance Brooks 7th

    ECTS (Allocated based on student) WORKLOAD
    Activities Quantity Duration (Hour) Total Work Load
    Lecture (14 weeks x Lecture hours per week) 0
    Laboratory / Practice (14 weeks x Laboratory/Practice hours per week) 0
    Midterm Examination (1 week) 0
    Final Examination(1 week) 0
    Preparation for Midterm Examination 0
    Preparation for Final Examination 0
    Assignment / Homework/ Project 0
    Seminar / Presentation 0
    Total Workload: 0
    ECTS Credit (Total workload/25): 0