IEORE4734 Foreign Exchange & Related Derivatives Instruments (1.5)
Prerequisites: Refer to course syllabus. Spring: Foreign Exchange and Its Related Derivative Instruments, taught by Professor D. DeRosa. This course covers the foreign exchange market and its related derivative instruments - the later being forward contracts, futures, options, and exotic options. What is unusual about foreign exchange is that although it can rightfully claim to be the largest of all financial markets it remains an area where very few have any meaningful experience. Virtually everyone has traded stocks, bonds, and mutual funds. Comparatively few individuals have ever traded foreign exchange. In part that is because foreign exchange is an interbank market. Yet ironically the foreign exchange markets may be the best place to trade derivatives - and for that matter invent new derivatives -- given the massive two-way flow of trading that goes though bank dealing rooms virtually twenty-four hours a day. And most of that is transacted at razor-thin margins, at least comparatively speaking, a fact that makes the foreign exchange market an ideal platform for derivatives. The emphasis in this course is on getting the student familiar with the nature of the foreign exchange market and on those factors that make it special among financial markets. This hopefully will enable the student to gain a deeper understanding of the related market for derivatives on foreign exchange.