FIN351 The Derivatives Market

This subject focuses on derivative products and markets; an area which has grown in size over the past century, with the value of derivatives exposures now dwarfing that of stock and bond exposures. The subject examines market structure, participants and the products used for managing risk and/or trading for profit. Students analyse, price and trade forwards, futures, swaps and options. The subject examines key markets for these contracts including derivative exposures over equities, interest rates, foreign exchange and commodities.

This subject contributes to the investment analysis specialisation.

For more information, please refer to the subject outline.

For Study Period 4 2023 onwards, please refer to the subject outline here.

  • Learning Outcomes
    • On successful completion of this subject, individuals should be able to:

      1. Assess the different types of derivative securities and instruments.
      2. Analyse the structure, processing and regulatory framework of derivatives markets.
      3. Value derivative exposures and construct options trading strategies.
      4. Construct hedging, arbitrage and speculative trading strategies using equity derivatives.
      5. Construct hedging, arbitrage and speculative trading strategies using short and long-term interest rate derivatives.
      6. Construct hedging, arbitrage and speculative trading strategies using FX and commodity derivatives.
  • Subject Content
    • Topic Title
      Topic 1 Introduction to derivative securities and instruments
      Topic 2 Trading in derivatives
      Topic 3 Pricing of forwards, futures and swaps
      Topic 4 Options pricing
      Topic 5 Options trading and strategies
      Topic 6 Equity derivatives
      Topic 7 Interest rate derivatives- short-term
      Topic 8 Interest rate derivatives- long-term
      Topic 9 FX derivatives
      Topic 10 Commodities

  • Duration
    • The duration of this subject is one study period (12 weeks).

  • Assessment
  • Prerequisites
    • There are no prerequisites for this subject. However please review the Assumed Knowledge tab to understand the prior knowledge Kaplan advises you should hold before enrolling in this subject.

  • Assumed knowledge
    • Whilst there are no prerequisites for this subject, Kaplan assumes that individuals have completed FIN251 Fixed Income Securities or understand the content covered in this subject, prior to undertaking FIN351 Derivative Markets.

  • Course transition subject equivalence
    • Individuals may not be required to complete this subject if they have transitioned from a SIA/Finsia/Kaplan course and have completed the following subjects within the course completion timeframe:

      • E112 Futures Markets and Trading
      • E113 Options Markets and Trading
      • FIN229 Options Markets and Trading
      • FIN329 Futures and Options Markets and Trading
  • Reading list
    • There is no prescribed text for this subject. Individuals are provided with key readings and access to Kaplan’s online databases. Individuals are encouraged to research and read widely on the topic.