Derivatives – Definition – Types – Forward Contracts – Futures Contracts – Options – Swaps – Differences between Cash and Future Markets – Types of Traders – OTC and Exchange Traded Securities – Types of Settlement – Uses and Advantages of Derivatives – Risks in Derivatives.

Specifications of Futures Contract - Margin Requirements – Marking to Market – Hedging using Futures – Types of Futures Contracts – Securities, Stock Index Futures, Currencies and Commodities – Delivery Options – Relationship between Future Prices, Forward Prices and Spot Prices.

Definition – Exchange Traded Options, OTC Options – Specifications of Options – Call and Put Options – American and European Options – Intrinsic Value and Time Value of Options – Option payoff, Options on Securities, Stock Indices, Currencies and Futures – Options Pricing Models – Differences Between Future and Option Contracts.

Payoff of Options on Futures - Binomial Model for Future Options - Valuation of Futures Options - Black’s Model - Interest Rate Options, Cap, Floor, Collar

Delta Hedging - Gamma Hedging - Making a portfolio Delta Neutral, Gamma Neutral, Delta Positive Gamma Neutral - Introduction to Swaps - Interest Rate Swaps, Currency Swaps, Cross-currency Swaps.