# Derivatives Pricing – Learning Roadmap

A derivative product is a financial instrument whose value is determined completely by external variables. The external factor, or the underlying, could be anything but in general is either a financial asset or an economic variable (such as interest rates).

Derivative instruments include forward and futures contracts, vanilla and exotic options, and swaps. These instruments may be priced or valued in a number of ways. Options for example may be valued using closed form solutions (like the Black-Scholes option pricing formula) or Monte Carlo Simulators or Binomial Trees.

# What are the prerequisites?

## Key concepts and terminology associated with Derivatives

As a first step in learning about Derivatives Pricing we begin by familiarizing ourselves with the related terminology. The following courses will help you grasp and get comfortable with the key concepts behind the derivatives language.

• Derivatives Crash Course for Dummies
• Derivative Pricing Equation Reference
• Derivative Products

# What topics are covered?

## Calculation tools for pricing derivatives

We start off with developing a better understanding of the Black Scholes equation before moving to pricing with Binomial trees and Monte Carlo Simulation. Pricing means determining the present value of the expected value of instrument on the valuation date. For this purpose therefore we also review interest rate modeling. These topics are covered in the following courses:

• Understanding N(d1) and N(d2)
• Building Monte Carlo Simulators in Excel
• Option Pricing with Binomial Trees in Excel Spreadsheets
• Interest Rate Simulation Crash Course

## Derivative instruments I will learn to price

We then move on to pricing specific derivative instruments:

• Pricing Interest Rate Swaps
• Interest Rate Options – Pricing Caps and Floors

## Related Video Courses

• Understanding N(d1) and N(d2)
• Option Pricing using Monte Carlo Simulation

## Random Testimonial

• ~ Corporate Training Testimonials

"A most amazing training - hands down the best, most useful, and most relevant I had during my tenure. Simply put, I loved it and will continue to build on the models.

Financial Modeling Course Participant
First Gulf Bank, Abu Dhabi, UAE

I have attended a number of training courses conducted by Alchemy technologies. Broadly, the areas covered have been Financial Risk Management aspects, Basel II implementation in Pakistan, as well as product knowledge for relatively new products in the our market for instance Financial Derivatives. As trainers, Mr. Jawwad Farid and his team bring in a wealth of conceptual knowledge entwined with their own professional experiences, adapting and honing it to our local market needs. The training courses are very informative and are delivered in a witty and energetic manner. The learning needs of the participants are kept in focus, and they are kept involved by interactive discussions and queries. Personally, I have always left these sessions with a much better understanding and grasp over the subjects delivered, which has helped me professionally.”

Treasury Middle Office
Habib Bank Limited

“Jawwad Farid has admirably led the training piece on the Treasury side covering Treasury risk, Treausury products, Derivatives (basic & Advanced), Fixed income securities (Basic & Advanced) and ALM training modules. Jawwad in our opinion is an “Outstanding Senior Trainer” who has deep subject matter knowledge and an uncanny ability to keep the participants engaged in the training process. So far our clients have expressed maximum level of satisfaction in Jawwad’s capability to deliver high value training programs, that have tangibly enhanced their staff’s skill sets.

Based on our direct more than satisfactory experience, Jawwad’s otherwise exceptional track record on the training side with over 90 technical skill building courses in South Asia, Middle Eastern and Far Easterm markets, we have no hesitation in strongly recommending Jawwad Farid for the training that for participants based out of Malaysia or the adjoining Far Eastern Markets.”