Course Title: Options, Futures and Risk Management

Part A: Course Overview

Course Title: Options, Futures and Risk Management

Credit Points: 12.00


Course Code




Learning Mode

Teaching Period(s)


City Campus


625H Economics, Finance and Marketing


Sem 1 2006,
Sem 2 2006,
Sem 1 2007,
Sem 2 2007,
Sem 1 2008,
Sem 2 2008,
Sem 1 2009,
Sem 2 2009,
Sem 1 2011,
Sem 2 2011,
Sem 1 2012,
Sem 2 2012,
Sem 2 2013,
Sem 1 2014,
Sem 2 2014,
Sem 1 2015,
Sem 2 2015,
Sem 1 2016,
Sem 2 2016,
Sem 1 2017,
Sem 2 2017,
Sem 1 2018


Malaysia Institute of Managemt


625H Economics, Finance and Marketing


Offsh 1 09

Course Coordinator: Obaid Awan

Course Coordinator Phone: +61 3 9925 1318

Course Coordinator Email:

Course Coordinator Location: Melbourne City Campus

Course Coordinator Availability: By Appointment

Pre-requisite Courses and Assumed Knowledge and Capabilities


Course Description

This course provides a detailed understanding of how derivative instruments are used to enhance returns and manage risks. The course is practically oriented, encompassing quantitative theoretical developments, the application of pricing to the business environment, and the development of quantitative financial skills. Students will explore innovative financial products and financial processes in equities, currencies, interest rates and commodities along with complex risk management tools.

Objectives/Learning Outcomes/Capability Development


On successful completion of this course you will be able to:

CLO1: Evaluate financial products and the markets in which they trade, including Futures and forwards, Equity options, swaps, and other derivatives, Commodities, Currencies, Corporate bonds and interest rates.

CLO2: Consider arbitrage arguments and hedging related to derivative products and fair value evaluation using a variety of advanced financial analysis techniques.  

CLO3: Appraise how Derivative Synthetics Position are created, and the application of equity derivatives (Equity Options, Stock Index Futures, Equity Swap), Currency Derivatives, Interest Rate Derivatives, Credit Derivatives and Commodities, for Trading, Hedging and Arbitrage Transactions


CLO4: Evaluate the use of derivative products for portfolio management and risk mitigation such as portfolio insurance and dynamic delta hedging and how various Hedge Ratios are calculated and applied.


CLO5: Argue how derivative instruments can be used in Credit Risk Management and the building of complex structured products such as Equity Linked Notes, Exotic Options, e.g. Asian Options, Knock Out Options, Look back option. Create a global arbitrage position with the SPX combos.


Overview of Learning Activities

In this course you will be an active learner.  Your learning will be supported through various in-class and online activities comprising individual and group work. These may include quizzes; assignments; prescribed readings; sourcing, researching and analysing specific information; solving problems; conducting presentations; producing written work and collaborating with peers on set tasks or projects.

Overview of Learning Resources

You have access to an extensive range of course materials on myRMIT studies/Canvas.  These resources include topic notes, additional resources such as case studies and videos, and information and guidance on case study analysis and writing of reports.

Overview of Assessment


Assessment Task 1: (20%)
Linked CLOs: 1, 2, 3, 4, 5

Assessment Task 2: (30%)
Linked CLOs: 1, 2, 3, 4, 5

Final Examination: (50%)
Linked CLOs: 1, 2, 3, 4, 5