487G - Global Derivatives Markets

Prerequisite: Business 320. This course will be in a “master class” format, providing students with a unique exposure to the global capital markets. The syllabus will be based upon a practitioner’s approach to applying the basics of asset valuation and derivatives theory to the real world of trading, portfolio management and capital markets. We shall apply theory from prior derivatives and finance classes to explore the real-world trading environment of a Wall Street brokerage house or hedge fund. There will be real industry involvement, in the form of project work based on actual executed trades and strategies, visiting speakers and the professor’s own industry experience. The hands-on format will prepare the student for a career on Wall Street. Students will learn trading strategies by being divided into “trading desks”, including interest rate, credit products, foreign exchange, equities and commodities A solid understanding of basic option theory will be extended to the learning about how the real-world markets are structured; the reasoning behind each trading strategy; and discussions of why the banks allocate capital and risk to these markets. Applications will mirror real-world practice, as each team of students will be responsible for structuring, valuing, building, hedging and risking their own portfolios. Each team will also be responsible for analyzing the quantitative exposure and risk on their portfolio, as well as looking at regulatory and legal aspects of the business. Following the current financial markets will be a major component of the course, as current events will determine the decision making strategies of each team’s projects. Each class will begin with a discussion of the markets and recent market events. Lecture content will be tailored to the market environment and students’ financial interests.