BE332-6-AU-CO:
Options and Futures

The details
2022/23
Essex Business School
Colchester Campus
Autumn
Undergraduate: Level 6
Current
Thursday 06 October 2022
Friday 16 December 2022
15
04 October 2022

 

Requisites for this module
BE311 and BE313
(none)
(none)
(none)

 

BE331, BE631

Key module for

BSC N420 Accounting and Finance,
BSC N422 Accounting and Finance (Including Placement Year),
BSC NN43 Accounting and Finance (Including Foundation Year),
BSC NNK3 Accounting and Finance (Including Year Abroad),
MACCN440 Accounting and Finance,
MACCN441 Accounting and Finance (Including Placement Year),
MACCN442 Accounting and Finance (Including Year Abroad),
BSC N390 Banking and Finance,
BSC N391 Banking and Finance (Including Foundation Year),
BSC N392 Banking and Finance (Including Placement Year),
BSC NH90 Banking and Finance (Including Year Abroad),
BSC N300 Finance,
BSC N301 Finance (Including Foundation Year),
BSC N302 Finance (Including Year Abroad),
BSC N304 Finance (Including Placement Year),
BSC N344 Finance and Management,
BSC N345 Finance and Management (Including Year Abroad),
BSC N346 Finance and Management (Including Placement Year),
BSC N347 Finance and Management (Including Foundation Year),
BSC N355 International Business and Finance,
BSC N356 International Business and Finance (Including Placement Year),
BSC N357 International Business and Finance (Including Year Abroad),
BSC N358 International Business and Finance (Including Foundation Year),
BSC N358CO International Business and Finance (Including Foundation Year)

Module description

The primary purpose of this module is to provide the student with the basic knowledge about options and futures, with five weeks allocated to each. For both halves of the module, we start off by defining the respective derivative contract, continue on to examining in detail how it is traded and then delve into its pricing and risk management/trading applications. The module is highly quantitative, with a total of nine weekly classes intended to go over a large quantity of numerical problems.

Module aims

The primary aim of this module is to give the students a good basic understanding of option, forward and futures contracts. Derivatives’ payoffs, their pricing and their uses in hedging will be main focus.

Module learning outcomes

On successful completion of the module, students will be able to:

• Describe futures and options contracts with precision
• Place within the context of credit risk mitigation the mechanics of how futures and options markets operate
• Identify an appropriate futures or options-based strategy to fulfil an investment objective
• Determine equilibrium futures contract prices
• Use binomial trees and the Black-Scholes model to price options.
• Quantify and manage portfolio risk exposure using option deltas.

Module information

Skills for Your Professional Life (Transferable Skills)

Analytical Domain
Academic and Cognitive Skills
A1 Synthesis and bringing together concepts and ideas
A3 Evaluation of evidence
A4 Creative problem solving
Data Analysis Skills
D1 Analysing quantitative data
D3 Analysing financial data
D4 Analysing Academic literature
Finance Skills
F1 Understand concepts and methodologies used to explain the behaviour of different financial market participants and the functioning of different financial market types F2 Apply key concepts and methodologies used to explain the behaviour of different financial market participants and the functioning of different financial market types

Learning and teaching methods

The module material will be delivered in the following way: * 2 hours of lectures per week; * Weekly workshops.

Bibliography

The above list is indicative of the essential reading for the course.
The library makes provision for all reading list items, with digital provision where possible, and these resources are shared between students.
Further reading can be obtained from this module's reading list.

Assessment items, weightings and deadlines

Coursework / exam Description Deadline Coursework weighting
Coursework   TEST     
Exam  Main exam: Remote, Open Book, 120 minutes during Summer (Main Period) 
Exam  Reassessment Main exam: Remote, Open Book, 120 minutes during September (Reassessment Period) 

Exam format definitions

  • Remote, open book: Your exam will take place remotely via an online learning platform. You may refer to any physical or electronic materials during the exam.
  • In-person, open book: Your exam will take place on campus under invigilation. You may refer to any physical materials such as paper study notes or a textbook during the exam. Electronic devices may not be used in the exam.
  • In-person, open book (restricted): The exam will take place on campus under invigilation. You may refer only to specific physical materials such as a named textbook during the exam. Permitted materials will be specified by your department. Electronic devices may not be used in the exam.
  • In-person, closed book: The exam will take place on campus under invigilation. You may not refer to any physical materials or electronic devices during the exam. There may be times when a paper dictionary, for example, may be permitted in an otherwise closed book exam. Any exceptions will be specified by your department.

Your department will provide further guidance before your exams.

Overall assessment

Coursework Exam
30% 70%

Reassessment

Coursework Exam
0% 100%
Module supervisor and teaching staff
Dr Luiz Vitiello, email: lrviti@essex.ac.uk.
Dr Luiz Vitiello & Dr Mark Hallam
ebsugcol@essex.ac.uk

 

Availability
Yes
Yes
No

External examiner

No external examiner information available for this module.
Resources
Available via Moodle
Of 86 hours, 85 (98.8%) hours available to students:
0 hours not recorded due to service coverage or fault;
1 hours not recorded due to opt-out by lecturer(s), module, or event type.

 

Further information
Essex Business School

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