Derivative Products

< 1 min read

Derivative Products

A derivatives product is a financial instrument whose value is determined completely by external variables. The external factor, or the underlying, could be anything but in general is either a financial asset or an economic variable (such as interest rates).

Topics covered:

  1. Basic definition of the different types of derivative instruments
  2. Payoff profiles for forwards, call and put options
  3. Synthetic configurations
  4. Qualifications in a typical derivatives term sheet
  5. Standard template for evaluating derivative products
  6. Comparison of various characteristics of derivative products
  7. Numerical examples of payoffs for vanilla products
  8. Derivative pricing basics for European options
  9. Greeks
  10. Binomial Trees and American options
  11. A more detailed look at:
  • Options
    • Options on shares, stocks, currencies, equities, indices and, warrants and convertibles
    • Options on rates such as bond options, interest rate caps, floors and collars, European swap options
    • Exotic options such as Bermuda, Quanto, Composite, Digital, Barrier, Asian, Lookback, Compound, Chooser, Basket, Shout, etc
  • Forwards
  • Futures
  • Swaps