Financial Derivatives | MBA 4th Sem | JNTUK

Syllabus

EF-401: Financial Derivatives

Unit – I

Introduction to Financial Derivatives – Meaning and Need – Growth of Financial Derivatives in India – Derivative Markets – Participants- Functions – Types of Derivatives – Forwards – Futures – Options-Swaps – The Regulatory Framework of Derivatives Trading in India.

Unit – II

Features of Futures –Differences Between Forwards and Futures – Financial Futures – Trading – Currency Futures – Interest Rate Futures – Pricing of Future Contracts- Value at Risk (VaR)-Hedging Strategies – Hedging with Stock Index Futures – Types of Members and Margining System in India – Futures Trading on BSE & NSE.

Unit – III

Options Market – Meaning & Need – Options vs Futures -Types of Options Contracts – Call Options – Put Options- Trading Strategies Involving Options – Basic Option Positions – Margins – Options on Stock Indices – Option Markets in India on NSE and BSE.

Unit – IV

Option Pricing – Intrinsic Value and Time Value- Pricing at Expiration – Factors Affecting Options Pricing- Put-Call Parity Pricing Relationship- Pricing Models - Introduction to Binominal Option Pricing Model – Black Scholes Option Pricing Model.

Unit – V

Swaps – Meaning – Overview – The Structure of Swaps – Interest Rate Swaps – Currency Swaps – Commodity Swaps – Swap Variant – Swap Dealer Role –Equity Swaps – Economic Functions of Swap Transactions - FRAs and Swaps.