BUSM 7022 Derivatives

Credit Points 10

Legacy Code 51169

Coordinator Peter Kavalamthara Opens in new window

Description This unit provides an introduction to the major classes of derivatives: forwards, futures, swaps and options. These are studied in detail with the objective of elucidating the ways in which these instruments can be used for the purposes of hedging, speculation and arbitrage. In addition to the analysis of derivative usage and market growth, considerable attention is given to the objective of gaining an understanding of the fundamentals of derivative pricing.

School Business

Student Contribution Band HECS Band 4 10cp

Check your HECS Band contribution amount via the Fees page.

Level Postgraduate Coursework Level 7 subject

Restrictions Students must be enrolled in a postgraduate Business program.

Learning Outcomes

On successful completion of this subject, students should be able to:
  1. Evaluate the operational mechanics of derivatives trading;
  2. Analyse the roles of the key participants in derivatives markets;
  3. Evaluate the institutional and organisational structure of key derivatives markets;
  4. Analyse the theoretical background to derivatives pricing such as cash and carry arbitrage and probability-based models;
  5. Explain the history of derivatives markets and risk management generally.

Subject Content

The nature of derivatives
Mechanics of futures markets
Hedging strategies
Using derivatives for risk management
Determination of forward and futures prices
Interest rate futures
Swaps
Mechanics of options markets
Properties of stock options
Trading strategies involving options
Introduction to option pricing models

Assessment

The following table summarises the standard assessment tasks for this subject. Please note this is a guide only. Assessment tasks are regularly updated, where there is a difference your Learning Guide takes precedence.

Item Length Percent Threshold Individual/Group Task
Mid-quarter examination 1.5 hours 30 N Individual
Group presentation 20 minutes 20 N Group
Final examination 2 hours 50 Y Individual

Prescribed Texts

  • Hull, J 2014, Fundamentals of futures and options markets, 8th edn, Pearson, Harlow, Essex. [Available online]

Teaching Periods

2022 Quarter 2

Parramatta City - Macquarie St

Evening

Subject Contact Heath Spong Opens in new window

Attendance Requirements 80% attendance rate is imposed in all core subjects’ due to the nature of class activities that are aligned with subject assessments.

View timetable Opens in new window

2022 Quarter 3

Online

Online

Subject Contact Peter Kavalamthara Opens in new window

Attendance Requirements 80% attendance rate is imposed in all core subjects’ due to the nature of class activities that are aligned with subject assessments.

View timetable Opens in new window