DRAFT. This version of the catalogue is a draft version and subject to change.
Unless you have been specifically directed here, you probably want to use the main catalogue.
Last modified: 20 May 2026 16:16
This course aims to provide students with a thorough understanding of derivative contracts such as forwards, futures and options written on a variety of underlying instruments. The course will cover important areas in derivatives and will employ both a theoretical and a practical perspective.
| Study Type | Undergraduate | Level | 4 |
|---|---|---|---|
| Term | Second Term | Credit Points | 15 credits (7.5 ECTS credits) |
| Campus | Aberdeen | Sustained Study | No |
| Co-ordinators |
|
||
Students will learn about the pricing mechanism of derivatives via appropriate methods (e.g., binomial models; Black-Scholes-Merton model), trading strategies with derivatives as well as the organization and structure of derivatives markets. The course will equip students with very good analytical and problem-solving skills in order to be able to incorporate derivatives into asset portfolio management, use them for hedging purposes and apply various trading strategies under different scenarios.
Topic areas may include but may not be limited to:
• Mechanics of futures markets
• Hedging with futures
• Determination of forward and futures prices
• Mechanics of options markets
• Properties of stock options
• Trading strategies with options
• Option valuation: Binomial trees
• The Black-Scholes-Merton model
• Dynamic hedging: Hedge parameters
Information on contact teaching time is available from the course guide.
| Assessment Type | Summative | Weighting | 25 | |
|---|---|---|---|---|
| Assessment Weeks | 34 | Feedback Weeks | 38 | |
| Feedback |
Each student should be allocated a PC for this exam and some blank pages or an exam book to work out the MCQ solutions. |
|||
| Knowledge Level | Thinking Skill | Outcome |
|---|---|---|
| Conceptual | Analyse | Exhibit a comprehensive understanding of the intricate market dynamics that govern the various categories of financial derivatives. |
| Conceptual | Analyse | Exhibit a comprehensive understanding of the intricate market dynamics that govern the various categories of financial derivatives. |
| Conceptual | Apply | Assess the value of forwards, futures, and options by employing appropriate models and methodologies. |
| Conceptual | Understand | Differentiate among different types of derivative products. |
| Assessment Type | Summative | Weighting | 75 | |
|---|---|---|---|---|
| Assessment Weeks | 40,41 | Feedback Weeks | 44,45 | |
| Feedback | ||||
| Knowledge Level | Thinking Skill | Outcome |
|---|---|---|
| Conceptual | Analyse | Exhibit a comprehensive understanding of the intricate market dynamics that govern the various categories of financial derivatives. |
| Conceptual | Analyse | Exhibit a comprehensive understanding of the intricate market dynamics that govern the various categories of financial derivatives. |
| Conceptual | Apply | Assess the value of forwards, futures, and options by employing appropriate models and methodologies. |
| Conceptual | Evaluate | Demonstrate knowledge and understanding of the various applications of derivatives in diverse scenarios, aimed at executing sophisticated risk management strategies. |
| Conceptual | Understand | Differentiate among different types of derivative products. |
| Procedural | Apply | Explain and apply trading/hedging strategies using futures and options. |
There are no assessments for this course.
| Assessment Type | Summative | Weighting | 100 | |
|---|---|---|---|---|
| Assessment Weeks | Feedback Weeks | |||
| Feedback | ||||
| Knowledge Level | Thinking Skill | Outcome |
|---|---|---|
|
|
||
| Knowledge Level | Thinking Skill | Outcome |
|---|---|---|
| Conceptual | Understand | Differentiate among different types of derivative products. |
| Conceptual | Apply | Assess the value of forwards, futures, and options by employing appropriate models and methodologies. |
| Procedural | Apply | Explain and apply trading/hedging strategies using futures and options. |
| Conceptual | Analyse | Exhibit a comprehensive understanding of the intricate market dynamics that govern the various categories of financial derivatives. |
| Conceptual | Analyse | Exhibit a comprehensive understanding of the intricate market dynamics that govern the various categories of financial derivatives. |
| Conceptual | Evaluate | Demonstrate knowledge and understanding of the various applications of derivatives in diverse scenarios, aimed at executing sophisticated risk management strategies. |
We have detected that you are have compatibility mode enabled or are using an old version of Internet Explorer. You either need to switch off compatibility mode for this site or upgrade your browser.
