Surrey University Stag

DERIVATIVES MARKETS - 2022/3

Module code: ECO3044

Module Overview

The module introduces the workings of financial and commodity derivatives markets and securities. Securities such as forwards, futures, swaps, CDOs and options have been traded on organised exchanges and/or ‘over the counter’, for decades. Financial markets are innovative and new derivative instruments are frequently introduced to facilitate risk-hedging or speculative investor operations. However, financial innovation can bring about its own significant risks, as the link between securitisation, CDOs and the credit crisis of 2007/08 showed. The emphasis of this module is on the pricing of derivative securities, their risks, as well as their use in professional settings, such as executive boards and derivative trading firms for hedging or investment purposes. 

Module provider

Economics

Module Leader

MANDILARAS Alexandros (Economics)

Number of Credits: 15

ECTS Credits: 7.5

Framework: FHEQ Level 6

JACs code: L100

Module cap (Maximum number of students): N/A

Overall student workload

Workshop Hours: 22

Independent Learning Hours: 79

Tutorial Hours: 5

Guided Learning: 11

Captured Content: 33

Module Availability

Semester 1

Prerequisites / Co-requisites

None

Module content

The module encompasses financial and commodity futures and options, as well as collateralised debt obligations (CDOs) and swaps.

Assessment pattern

Assessment type Unit of assessment Weighting
Coursework ASSESSMENT 1: INDIVIDUAL CFO REPORT 30
Project (Group/Individual/Dissertation) ASSESSMENT 2: GROUP OPTIONS TRADING PROJECT 30
Examination Online ASSESSMENT 3: FINAL EXAM 40

Alternative Assessment

The alternative assessment for the group options trading project is an individual assignment.

Assessment Strategy

The assessment strategy is designed to provide students with the opportunity to demonstrate that they have achieved the module’s learning outcomes and, by association, developed their digital capabilities, resourcefulness and resilience, and employability skills among other module attributes. 

Thus, the summative assessment for this module consists of: 



  • An individual project (“Chief Financial Officer Report”), which is connected to learning outcome 2 (30%). Students will need to research market data, analyse market conditions, be creative and synthesise a professional quality company report.


  • A group project (“Options Trading Project”), which is connected to learning outcomes 3, 4 and 5 (30%). Students will learn how to work together in the context of a diverse group, engage in conflict resolution if the need emerges and develop their digital skills and employability using a trading platform. 


  • A final exam, which is connected to learning outcome 1 (40%). Here students can critically engage with aspects of the module material and solve problems under time constraint.



Formative assessment 

Weekly self-tests with built-in feedback are provided to enhance student learning in the way described earlier. 

Feedback 

There are many opportunities for students to receive feedback during the live sessions. Assessment feedback is in the following forms:  

The CFO Report (assessment 1), and Options Trading Project (assessment 2) benefit from feedback, which is made available through special forms. These are posted on each student’s individual space on SurreyLearn, within the University’s designated deadlines and include comments on student performance and advice on how to improve, where appropriate.  

Module aims

  • Equip students with systematic knowledge and critical awareness of financial and commodity derivatives markets and the securities traded in them.
  • Develop students' employability, resourcefulness and resilience, as well as their digital capabilities by engaging them in suitable, authentic assessments.
  • Enhance students' confidence in their ability to write company reports, trade in derivatives markets and solve problems under time constraint.

Learning outcomes

Attributes Developed
001 Solve problems involving derivative securities under time-constraint KC
002 Research resources, use knowledge, analyse data and present arguments to write a professional report KCPT
003 Trade in options contracts and options strategies in a simulated 'live' market KCPT
004 Work in groups to produce a joint report on group investment performance and present results using video technology KCPT
005 Present in-depth analysis of pricing procedures for derivative securities KC

Attributes Developed

C - Cognitive/analytical

K - Subject knowledge

T - Transferable skills

P - Professional/Practical skills

Methods of Teaching / Learning

The learning and teaching strategy is designed to ensure that students achieve the module’s learning outcomes and develop competencies in the corresponding aspects of the curriculum framework (employability, digital capabilities, and resourcefulness and resilience). Students have access to pre-recorded mini videos summarising the learning outcomes of the week ahead of the two weekly live workshops. In the workshops student learning outcomes are enhanced via online polling and engaging in applied work that often involves financial data. Students are encouraged to actively participate by voting, solving problems, and taking part in class discussions. There is also weekly guided learning, in the form of self-tests with built-in feedback. These tests do not carry any marks and are mapped to the week’s material to ensure that students have had several opportunities to achieve the week’s learning outcomes. Finally, students practice solving exercises during bi-weekly tutorial sessions. 

The learning and teaching methods include:


  • Pre-recorded videos 

  • Weekly workshops that are recorded and released

  • Guided learning 

  • Tutorials 

  • Independent work


Indicated Lecture Hours (which may also include seminars, tutorials, workshops and other contact time) are approximate and may include in-class tests where one or more of these are an assessment on the module. In-class tests are scheduled/organised separately to taught content and will be published on to student personal timetables, where they apply to taken modules, as soon as they are finalised by central administration. This will usually be after the initial publication of the teaching timetable for the relevant semester.

Reading list

https://readinglists.surrey.ac.uk
Upon accessing the reading list, please search for the module using the module code: ECO3044

Other information

Consistent with Surrey's curriculum framework, the School of Economics is committed to developing graduates with strengths in employability, digital capabilities, global and cultural capabilities, sustainability, and resourcefulness and resilience. This module is designed to allow students to develop knowledge, skills, and capabilities in the following areas: 

Employability:

Through the module’s learning and assessment activities, and especially the individual Chief Financial Officer (CFO) Report and the Options Trading Project, students develop independent judgement, collaborative skills as part of a small group with a common goal, and cognitive skills that enable them to reflect critically on their own practice. 

Digital Capabilities:

Students will work with spreadsheet software throughout their learning for the module and financial trading software in the context of the group project. The former will allow students to program formulas and carry out tasks and calculations that show how theoretical concepts translate into concrete outcomes hence motivating their learning and increasing their confidence. The latter will allow students to develop and practice trading skills, as well as experience how theoretical concepts are practically used in the market.

Resourcefulness and Resilience:

Students will be connected communicators as they work collaboratively for the group project and reflect on their contribution and benefits from participating. In addition, through the various feedback points, they will have the opportunity to develop a responsive attitude to feedback by recognizing successes and opportunities for development. 

Programmes this module appears in

Programme Semester Classification Qualifying conditions
Economics and Finance BSc (Hons) 1 Compulsory A weighted aggregate mark of 40% is required to pass the module
Financial Mathematics BSc (Hons) 1 Compulsory A weighted aggregate mark of 40% is required to pass the module

Please note that the information detailed within this record is accurate at the time of publishing and may be subject to change. This record contains information for the most up to date version of the programme / module for the 2022/3 academic year.