B5254 - INTRODUCTION TO FINANCIAL DERIVATIVES AND HEDGING

Academic Year 2026/2027

  • 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 the world of financial derivatives, offering students a foundational understanding of these complex financial instruments and their practical applications. The course will delve into the mechanics of futures and forward markets, explore hedging strategies, and shed light on the intricacies of options markets. As we progress, students will be introduced to the theories and real-world implications of stock option pricing, swap markets, and interest rate derivatives. The course will adopt a practitioner's perspective, ensuring that students not only grasp the theoretical underpinnings but also appreciate the pragmatic use of derivatives in modern finance.

Course contents

Week 1:

Introduction and Mechanics ofFutures Markets; Chapters 1 and 2

Week 2:

Hedging Strategies Using Futures; Chapter 3

Week 3:

Interest Rates; Chapter 4

Week 4:

Determination of Forward and Futures Prices; Chapter 5

Week 5:

Interest Rate Futures; Chapter 6

Week 6:

Swaps; Chapter 7

Week 7:

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

Week 8:

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

Week 9:

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

Readings/Bibliography

Hull, John C. Options, Futures, and Other Derivatives, 11th Edition

Teaching methods

Lectures

Assessment methods

mid-term, and final exam

Office hours

See the website of Filippo Massari