The course introduces students to one of the most important and most technically challenging areas in finance: derivative securities. Derivative securities include options, futures, forward contracts and swaps. This course examines corporate risk management techniques and how derivatives can be used to manage risk. This course will also cover institutional characteristics of derivatives exchanges, OTC markets and market clearing mechanisms. Finally, we will examine the pricing of derivatives and their use to build trading strategies and structured products. In accordance with the role that financial intermediaries also have in promoting the transition to a socially sustainable business model, a lesson will be devoted to the guidelines that can help identify whether a product constructed as a combination of derivatives can be considered ESG.
The goal of the course is to provide students with a complete overview of the main derivatives contracts, describing valuation issues and potential uses.