BUU44650 Derivatives 2025/26

(5 ECTS) 

Lecturer:

Daniel Kamphambale

Email:
Office Hours: Available by appointment. Please email to schedule a meeting.

Pre-Requisite:

BUU22550 - Introduction to Finance

Available to Exchange students 

Module Description

Derivatives are financial instruments whose value is based on underlying assets such as equities, commodities, interest rates, currencies, or inflation-linked indices. Over the last three decades, they have become integral to global financial markets, enabling institutions and investors to manage exposures or pursue speculative opportunities in response to market expectations. This module explores the primary types of derivatives: forwards, futures, options, and swaps, demonstrating how they are utilised to achieve various hedging and speculation objectives while providing a framework for pricing derivatives. The aim is to equip learners with a comprehensive understanding of derivative instruments and their application in financial risk management, pricing strategies, and speculative decision-making.

Learning and Teaching Approach

This module is structured around weekly lectures and tutorials. Lecture slides and supporting materials will be shared in advance of lectures to enable students to prepare. Practice questions will be provided throughout the module, and tutorial sessions will be utilised to discuss solutions and develop problem-solving strategies. This format is designed to help students develop both conceptual understanding and practical skills.

Learning Outcomes

Upon successful completion of this module, you will be able to:

1. Explain the structure and function of key derivative instruments: forwards, futures, options, and swaps, and their roles within financial markets.
2. Apply analytical techniques to value derivative instruments, using appropriate pricing models and mathematical tools.
3. Evaluate the strategic use of derivatives in hedging and speculation to manage financial risk and enhance investment decisions.
4. Critically assess real-world derivative failures and extract key lessons related to financial regulation, risk management, and ethical practice.

Workload

Textbook and Readings

Hull, J. (2017), Fundamentals of Futures and Options Markets, Eighth Edition, Pearson Education Limited

Reference will be made to additional material throughout the course. Please refer to Blackboard for details.

Course Communication

Lecture slides, tutorial solutions, relevant journal articles, assessment descriptions, announcements and term results will be posted on Blackboard.

Please note that all course related email communication must be sent from your official TCD email address. Emails sent from other addresses will not be attended to.

Assessment:

Assessment for this course will be as follows:

1. Derivatives Mid-Term Examination (Individual): 20%
2. Final Examination (Individual): 80%.

Note on the assessment of students permitted to sit a supplementary exam

Students who do not pass this module must take a supplemental examination.  

Biographical Note

Daniel Kamphambale is a Doctoral Researcher in Economics at Technological University Dublin. His research explores the role of education in sustainable economic development, with a focus on the United Nations Sustainable Development Goals and interdisciplinary approaches to addressing educational and economic challenges. He holds a BA (Hons) in Accounting and Finance and a Master’s in Accounting and Finance Management, which included specialised coursework in portfolio management and financial derivatives such as options, futures, and forwards, as well as practical experience with pricing techniques including the Black-Scholes model. Before beginning his doctorate, he spent over a decade in banking and corporate finance, working in credit analysis, treasury operations, and financial reporting. His responsibilities included managing interest rate risk, analysing counterparty exposure, and implementing hedging strategies. He also gained entrepreneurial experience managing small and medium-sized enterprises (SMEs). Daniel has taught undergraduate and postgraduate courses in finance, accounting, econometrics, and mathematics at Technological University Dublin. He is also an Assistant Editor of Critical Letters in Economics and Finance and a member of the Irish Economic Association, the Community of Practice–Ireland, and the European Laboratory for Pedagogical Action Research (ELaRA), part of the European University of Technology (EUt+) alliance.