CFA Level 2: Derivatives Part 2 – Introduction- This is the second tutorial of two covering derivatives for the Level II CFA Exam. The topics of op...

## COURSE

## Derivatives Part 2

- An option is a derivative instrument that gives its holder a right to buy or sell an asset, at a set...
- The prices of put and call [options](https://financetrain.com/introduction-to-options/ "Introduction...
- - The following model can be used for [options](https://financetrain.com/introduction-to-options/ ...
- Call option price formula for the [single period binomial option pricing model](https://financetrain...
- - Similar to the applications of the interest rate tree discussed in fixed income, a variation of ...
- - Commonly called "Black-Scholes" outside the CFA exam world. - BSM is a model for deriving the ...
- The Black-Scholes-Merton model has six inputs (or five, if gamma is considered a sub-part of delta);...
- - Traders and securities dealers can use an option's delta to create hedges for the price risk exp...
- - A key challenge in using either [Black-Scholes-Merton](https://financetrain.com/black-scholes-me...
- - An option can be created for a [forward contract](https://financetrain.com/what-are-forward-cont...
- Swaps are private over the counter agreements that are largely unregulated; swaps can be highly cust...
- In an interest rate swap, two parties will agree to: term, fixed rate, floating rate benchmark (comm...
- An equity swap is a derivative contract in which two counterparties agree to exchange a set of their...
- - Currency swaps have some key differences from [interest rate swaps](https://financetrain.com/pla...
- - **Pricing:** The determination of initial swap terms at the start of the swap's life - Intere...
- - The price of a [plain vanilla interest rate swap](https://financetrain.com/plain-vanilla-interes...
- - Four types of [currency swaps](https://financetrain.com/currency-swaps/ "Currency Swaps") exist:...
- - Three common types of [equity swaps](https://financetrain.com/equity-swaps/ "Equity Swaps") are:...
- - [Interest Rate Swaps](https://financetrain.com/plain-vanilla-interest-rate-swap/ "Plain Vanilla ...
- - Swaption provides option holder the option to enter into a swap. - **Payer vs. Receiver** - ...
- - **Current [Credit Risk](https://financetrain.com/overview-of-credit-risk/ "Overview of Credit Ri...
- - Interest rate caps and floors are option like contracts, which are customized and negotiated by ...
- ## What are Credit Default Swaps (CDS)? - A Credit Default Swap is an agreement between two parti...
- - **Basis Trades:** Made based on the difference between a bond's yield and the [CDS](https://fina...

## LESSONS

Introduction to Options

Synthetic Options and Rationale

One Period Binomial Option Pricing Model

Call Option Price Formula

Binomial Interest Rate Options Pricing

Black-Scholes-Merton (BSM) Option Pricing Model

Black-Scholes-Merton Model and the Greeks

Dynamic Delta Hedging & Gamma Related Issues

Estimating Volatility for Option Pricing

Put-Call Parity for Options on Forwards

Introduction to Swaps

Plain Vanilla Interest Rate Swap

Equity Swaps

Currency Swaps

Swap Pricing vs. Swap Valuing

Pricing and Valuing a Plain Vanilla Interest Rate ...

Pricing and Valuing Currency Swaps

Pricing and Valuing Equity Swaps

Swaps as Theoretical Equivalents of Other Derivati...

Swaptions and their Valuation

Swap Credit Risk and Swap Spread

Interest Rate Derivatives - Caps and Floors

Credit Default Swaps (CDS)

Credit Derivative Trading Strategies