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Derivatives

This course is part of Financial Markets Specialization

Instructor: Giuliano Curatola

Included with

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5 modules

Gain insight into a topic and learn the fundamentals.

Intermediate level

Recommended experience

8 hours to complete

Flexible schedule

Learn at your own pace

5 modules

Gain insight into a topic and learn the fundamentals.

Intermediate level

Recommended experience

8 hours to complete

Flexible schedule

Learn at your own pace

What you'll learn

Evaluate the effect of investment strategies on the risk and return of a portfolio
Evaluate different uses of financial derivatives (e.g., hedging, speculation)
Evaluate different pricing models to calculate the price of the various financial instruments
Develop and employ theoretical asset pricing models to price these derivative instruments

Skills you'll gain

Details to know

Shareable certificate

Add to your LinkedIn profile

Assessments

9 assignments

Taught in English

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Build your subject-matter expertise

This course is part of the Financial Markets Specialization

When you enroll in this course, you'll also be enrolled in this Specialization.

Learn new concepts from industry experts
Gain a foundational understanding of a subject or tool
Develop job-relevant skills with hands-on projects
Earn a shareable career certificate

There are 5 modules in this course

This course covers standard derivative pricing models. Both discrete time and continuous time techniques are considered. The course also includes an introduction to numerical option pricing, in particular the Monte Carlo Method.

Module details

By the end of this week you will learn: fixing some notation; describe the pay-off structure of financial assets; evaluate possible usages of derivatives (hedging, speculation).

What's included

12 videos11 readings2 assignments

12 videosTotal 16 minutes

Welcome!1 minute
Introduction1 minute
Bonds: definitions1 minute
Classification of bonds1 minute
Reasons and risk of trading bonds1 minute
Stocks: definition1 minute
Trading Stocks1 minute
Future contracts: definition 1 minute
Options: definition (part 1)1 minute
Options: definition (part 2)1 minute
Options: Bounds of option prices2 minutes
Options: Trading strategies involving options2 minutes

11 readingsTotal 88 minutes

Bonds: definitions1 minute
Bonds15 minutes
Stocks10 minutes
Forward contract and Future contract15 minutes
Options: definition (part 1)10 minutes
Options: definition (part 2)7 minutes
Let's practice5 minutes
Options15 minutes
Risk management using derivatives5 minutes
Let's practise3 minutes
To sum up2 minutes

2 assignmentsTotal 35 minutes

Financial assets 30 minutes
Bonds5 minutes

By the end of this week, you will understand the replication of a payoff function, state prices and risk neutral probabilities. Additionally, you will learn how to compute option prices in discrete time models.

What's included

8 videos10 readings3 assignments

8 videosTotal 16 minutes

A simple period model of security prices: portfolios4 minutes
A single period model of security prices: pricing via replication3 minutes
Pricing options by state prices2 minutes
Pricing assets using risk neutral probabilities: examples2 minutes
Pricing options using risk neutral probabilities2 minutes
Pricing assets by state prices: examples1 minute
A Multi-period model of security prices2 minutes
Pricing american options1 minute

10 readingsTotal 52 minutes

A simple period model of security prices (part 1)8 minutes
Let's practice!2 minutes
A single period model of security prices (part 2)12 minutes
Let's practice!5 minutes
Pricing by state prices5 minutes
Pricing by risk neutral probabilities5 minutes
Let's practice!4 minutes
A Multi-period model of security prices7 minutes
Pricing american options3 minutes
To sum up1 minute

3 assignmentsTotal 37 minutes

Discrete time models30 minutes
Pricing assets by state prices: exercise 5 minutes
Pricing assets using risk neutral probabilities: examples2 minutes

By the end of this week, you will learn about stochastic processes and Itô's lemma, financial markets in continuous time, and option pricing in continuous time.