Derivatives

Master derivative instruments and pricing models — the foundation for understanding DeFi options, futures, and complex financial products. This module covers the full derivatives lifecycle from instrument features and market structure through to quantitative pricing frameworks, connecting each concept to its decentralized finance counterpart on protocols like Synthetix, dYdX, Opyn, and GMX.

Topics

Foundations

• Topic 1: Derivative Instrument and Derivative Market Features
• Topic 2: Forward Commitment and Contingent Claim Features and Instruments
• Topic 3: Derivative Benefits, Risks, and Issuer and Investor Uses

Pricing Theory

• Topic 4: Arbitrage, Replication, and the Cost of Carry in Pricing Derivatives

Forward Commitments

• Topic 5: Pricing and Valuation of Forward Contracts
• Topic 6: Pricing and Valuation of Futures Contracts
• Topic 7: Pricing and Valuation of Interest Rates and Other Swaps

Contingent Claims

• Topic 8: Pricing and Valuation of Options
• Topic 9: Option Replication Using Put-Call Parity
• Topic 10: Valuing a Derivative Using a One-Period Binomial Model

Cross-Module Links

The Derivatives module connects deeply to other areas of the finance curriculum:

• Fixed Income — Interest rate derivatives, duration management, yield curve bootstrapping for swap pricing
• Equity Investments — Options on equities, index futures, synthetic equity positions
• Portfolio Management — Protective puts, covered calls, risk budgeting with derivatives
• Economics — Currency forwards, interest rate parity, macroeconomic hedging