Options

This course covers the theoretical and practical frameworks to understand financial derivatives. The goals of the course are as follows: 1) Understand the specific characteristics of derivatives as an asset class; 2) learn the differences of different types of derivatives in terms of risk profile, cash flow, margin requirements, etc.; (3) understand the pricing models used for different derivatives; (4) apply different investment and hedging strategies using options.

Although the use of derivatives can be traced back to several centuries ago, their wide spread usage is a recent event. One of the main limitations for the development of derivatives formal markets was the inexistence of pricing models. In this course we will analyze the different types of derivatives and its specific characteristics, especially their
applications and limitations for hedging strategies. Among the different kinds of derivatives, this course will be especially focused on options.