Options and Futures Markets

As Taught Spring Semester 2011



Professor W Morgan, School of Economics, University of Nottingham

Module Title: Options and Futures Markets  

Module Code: L14080

Total Credits: 15

Level of Study: Post Graduate

Offering School: School of Economics

Frequency of Class: 1 x 2 hour lecture per week

Targeted Students: Students registered on the MSc degrees in the School of Economics

The content presented here provides information for prospective students on module L14080 ‘Options and Futures Markets’, offered by the School of Economics, University of Nottingham. The module convenor is Professor W Morgan.

In the past three decades, there has been a phenomenal growth in futures markets trading. Until the 1960s, trading activity was largely limited to storable agricultural commodities. Futures contracts were introduced for non-storable commodities in the mid-1960s and for financial instruments in the 1970s. In the 1980s, options on futures contracts grew rapidly in trading volume. Futures and option markets are now important economic institutions in the global market economy. Understanding their operation and their behaviour not only gives an insight into a major segment of financial markets but also provides an opportunity to develop a broader appreciation of the forces that shape and change the behaviour of agents in an increasingly globalised economy.

Brief Module Outline

  • The markets and the mechanics of trading
  • Futures markets and price relationships for commodities and financial instruments
  • Hedging and futures markets
  • Speculation using futures markets
  • Option markets and the pricing of options
  • Speculation and hedging with options
  • Pricing efficiency and the Efficient Market Hypothesis
  • Regulation of futures and option markets
  • Trading exercise and student presentations