Derivatives Crash Course for Dummies
Derivatives Crash Course for Dummies
A review of posts that present a free introductory course for beginners with simple examples to introduce basic vanilla derivative products as well as the difference between forwards, futures and options. For a more detailed Crash course in Corporate Finance to build the foundations required to complete this course please see the Corporate Finance Training Guide Road map.
In our Derivative Crash Course, we start off with Derivative Payoff profiles and synthetics construction of products, followed by a set of simple assessment quizes and a derivative pricing and equation reference. The Crash Course is followed by an intermediate course that reviews product variation and basic pricing concepts. The objective here is to simply introduce derivative concepts in bite sized pieces.
Master Class: Options and derivatives crash course: Session One: Terminology
Master Class: Options and Derivatives Crash Course: Session Two: Forward, Futures and Options
Master Class: Options and Derivatives Crash Course: Session Three: Payoff profiles – Forwards
Master Class: Options and Derivatives Crash Course: Session Five: Synthetics
Master Class: Derivatives Crash Course: What did you miss in the Synthetic forward diagram above
Derivatives Crash Course – Related Training Workshops & Transcripts
Understanding Derivatives Sales Process: Introducing the Bank Treasury Function
Selling derivatives products to treasury customers
Derivatives Crash Course – Derivatives Pricing Reading & Training Materials
Option Pricing using Binomial Trees in Excel
Option Pricing – Building Monte Carlo Simulators in Excel
Option Pricing using Monte Carlo Simulation – Model Review
Option Pricing – Pricing Ladder Options using Monte Carlo Simulators in Excel
Derivatives Crash Course – Advance Topics – Understanding Greeks
Understanding Option Greeks – A quick reference guide to Delta, Gamma, Vega, Theta and Rho
Understanding Option Greeks – A second look at Delta and Gamma
Derivatives Crash Course – Additional Reading Material
If you would like to learn more about this subject we also recommend the second more advanced course on derivative products that digs deeper into the subject.
Also see review of Fixed Income derivatives, MTM & Valuation Models for a review of Interest Rate Swaps, Caps & Floors. The Fixed Income derivatives, MTM & Valuation Models course also walks through the basics of building a simple valuation model.
In addition, once you have completed your Fixed Income Derivatives Review, you should also see the two step by step pricing case studies. The first case walks through the process of building a projected forward interest rate curve using the bootstrapping approach. The second case reviews the process of Mark to Market for an Interest Rate Swap under the original term structure as well as the revised and updated interest rate term structure 6 month later.
Between the two cases we build a 5 step, 5 year curve and then extend it to hedge a 10 step, semi annual floating rate loan with an Interest Rate Swap.
a. Bootstrapping Zero and Forward Interest Rate Curves in Excel
b. Pricing, MTM, Valuing Interest Rate Swaps using Forward Curves in Excel
Exotic Option pricing using Monte Carlo Simulation Excel Sheet is now available for sale
