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2014/2015  BA-BHAAI1008U  Trading in financial markets

English Title
Trading in financial markets

Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration Summer
Course period Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Course instructor - Dr. Lars Stentoft, University of Western Ontario
    Patricia Plackett - MPP
Main academic disciplines
  • Finance
Last updated on 12-02-2014
Learning objectives
At the end of the course the student should be able to:
  • Understand the crucial themes, theories and concepts presented in the course.
  • Choose, combine and apply these themes, theories and concepts in analysis of theory/cases/examples.
  • Draw conclusions and recommendations based on these applications.
Course prerequisites
This course requires that students have obtained good results in a Financial Management course. In addition, it requires practical use of various derivative products like options and futures. Although a general introduction will be given, it is the responsibility of students to ensure that they have a sufficient prior knowledge of these products.
Prerequisites for registering for the exam
Number of mandatory activities: 1
Compulsory assignments (assessed approved/not approved)
Mandatory Mid-term Assignment: Students are required to conduct a technical analysis of two stocks or stock indices, recommend an appropriate investment strategy based on this analysis, and explain how this strategy can be implemented using available options on the underlying asset (4 page report).
Examination
4-hour written exam:
Exam ECTS 7,5
Examination form Written sit-in exam
Individual or group exam Individual
Assignment type Written assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Summer Term
Aids allowed to bring to the exam Limited aids, see the list below and the exam plan/guidelines for further information:
  • Allowed calculators
  • Allowed dictionaries
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Course content and structure

This course aims at introducing the student to the use of trading platforms, to the principal financial markets, to the interaction existing between these markets, and the operations in trading room. In addition, students are introduced to the ways in which trading may be conducted, the various types of trades and trading strategies, the role of the different market participants, and the importance and practical consequences of the organization of financial markets. A range of theories, concepts, and cases will be introduced during the course.
For the Preliminary Assignment students are required to install the software needed during class (available for free from the FTS webpage), read the manual (available in PDF format), run a demo trading case (can be done individually online), and document and explain the trades in an Excel spreadsheet. For the Mandatory Mid-term Assignment students are required to conduct a technical analysis of two stocks or stock indices, recommend an appropriate investment strategy based on this analysis, and explain how this strategy can be implemented using available options on the underlying asset (4 pages). 

Class Schedule

Class Topic
Class 1 Introduction to the course and to trading in financial markets
Class 2 Valuation in general and technical analysis
Class 3 Futures and options on stock indices; Preliminary Assignment due
Class 4 Option trading strategies
Class 5 Bond and interest rate markets;Mandatory Mid-term Assignment due
Class 6 Commodity and currency markets
Class 7 Markets in practice and inter-market analysis
Class 8 Alternative investments
Class 9 Risks and risk management
Class 10 Risks and risk management
Class 11 Comprehensive Review
Teaching methods
In this course regular class lectures are complemented by assignments and trading cases.
Further Information
Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings or video clips to be read or viewed before the start of classes with a related task scheduled for class 3 in order to 'jump-start' the learning process.
Expected literature
Textbook:  Boyer, M., Cenesizoglu, T. and Stentoft, L. (2012): "Investing and Trading in Financial Markets", HEC Montreal.
Complementary (not required reading):
Valdez, Stephen. An introduction to global financial markets, McMillan Press Ltd., London, 2000. (Highly recommended reading)
Murphy, John J. Technical analysis of the financial markets, New York Institute of Finance, 1999.
Malkiel, Burton: A random walk down Wall Street.
Last updated on 12-02-2014