93089 - Introduction To Financial Derivatives And Hedging

Academic Year 2025/2026

  • Teaching Mode: In-person learning (entirely or partially)
  • Campus: Bologna
  • Corso: First cycle degree programme (L) in Economics and Finance (cod. 8835)

Learning outcomes

This course introduces students to the concepts of financial risks and to the techniques used to manage those risks using financial derivatives. After showing how to measure risk and its impact on the firm’s business, the course illustrates the functioning of derivatives, such as forward and futures, swaps and options, and their use to hedge financial risks.

Course contents

This course covers forwards, futures, swaps, and options. By the end of the course, students will have good knowledge of how these products work, how they are used, how they are priced, and how financial institutions hedge their risks when they trade the products.

In the specific we will cover these topics/chapters

Introduction and Mechanics of Futures Markets; Chapters 1 and 2

Hedging Strategies Using Futures; Chapter 3

Interest Rates; Chapter 4

Determination of Forward and Futures Prices; Chapter 5

Interest Rate Futures; Chapter 6

Swaps; Chapter 7

Securitization, the Credit Crisis and XVAs; Chapters 8 and 9

Mechanics of Option Markets and Properties of Options; Chapters 10 and 11

Trading Strategies Involving Options and Binomial Trees; Chapters 12 and 13

The Black–Scholes–Merton Model; Chapter 15 (excl. 15.6)

Employee Stock Options; Chapter 16

Options on Stock Indices, Currencies and Futures;Chapters 17 and 18

Readings/Bibliography

Options, futures, and other derivatives, 11 edition, John C. Hull.

Teaching methods

lectures in person

Assessment methods

written exam

Teaching tools

slides

Office hours

See the website of Filippo Massari