232D - Option Markets

Faculty: Geske, R.

This course offers an introduction to derivative markets. Derivatives are both exchange traded and over-the-counter securities. The derivative markets are the world’s largest and most liquid. This course will focus on the organization and role of put and call options markets, futures and forward markets, and their interrelations. The emphasis will be on arbitrage relations, valuation, and hedging with derivatives. The course will also cover the implementation of derivative trading strategies, the perspective of corporate securities as derivatives, the functions of derivatives in securities markets, and recent innovations in derivative markets. Students will learn the fundamentals of derivatives by playing a trading game and writing a term paper analyzing their derivative strategies.

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