# 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
- Advance Derivatives Crash Course

# 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

**Related PDF Fles**

- Derivatives Terminology Crash Course
- Derivative Products
- Derivatives Pricing- Binomial Trees- The Efficient Approach
- Pricing IRS –Term Structures
- Pricing IRS- IRS & CCS
- Pricing Interest Rate Options
- How to construct a Black Derman Toy Model in EXCEL
- How to utilize results of a Black Derman Toy Model
- Interest Rate Simulation Crash Course

**Related EXCEL Files**

- Derivative Pricing – Binomial Trees
- Pricing IRS – Module I – Term Structures
- Pricing IRS – Module II – IRS and CCS
- Pricing Interest Rate Options – Module III
- Monte Carlo Simulation – Commodity
- Monte Carlo Simulation – Currency
- Monte Carlo Simulation – Equity
- Valuing Options – Black Scholes
- Valuing Options – Binomial Tree – Traditional Approach
- Calibration of the CIR Model Example
- Black Derman Toy Model Construction – EXCEL Example
- How to utilize the results of a Black Derman Toy Model –EXCEL Example
- Heath Jarrow Merton – HJM 3 – Factor Interest Rate Model
- Principal Component Analysis – PCA – US Treasury Yield Rates

## Search the site

## Pages

- Self Study
- Learning Roadmaps
- Asset Liability Management – Learning Roadmap
- Basel II & Basel III Frameworks – Learning Roadmap
- Commodities – Learning Roadmap
- Corporate Finance – Learning Roadmap
- Derivatives Pricing – Learning Roadmap
- ICAAP (Internal Capital Adequacy), Stress Testing and Credit Risk – Learning Roadmap
- Internal Capital Adequacy Assessment Process (ICAAP) – Learning Roadmap
- Monte Carlo Simulation – Learning Roadmap
- Setting Market Risk Limits – Learning Roadmap
- Treasury Products and Operations – Learning Roadmap
- VaR (Value at Risk) – Learning Roadmap

- Topic Guides
- Asset Liability Management (ALM) Crash Course – Topic Guide
- Basel & ICAAP – Topic Guide
- Black Derman Toy (BDT) Interest Rate Model – Topic Guide
- Calculating Value at Risk (VaR) – Topic Guide
- Credit Analysis & Credit Process – Topic Guide
- Derivative Pricing – Topic Guide
- Derivative Products – Topic Guide
- Forward Rates and Forward Prices – Topic Guide
- Heath Jarrow Merton (HJM) Interest Rate Model – Topic Guide
- Interest Rate Simulation Crash Course – Topic Guide
- Monte Carlo Simulation – Topic Guide
- Pricing Interest Rate Swaps & Interest Rate Options – Topic Guide
- Setting Counterparty Limits – Topic Guide
- Treasury Crash Course – Topic Guide

- Video Courses
- ALM and Capital Adequacy – Course Outline
- Calculating VaR ( Value at Risk) – Course Outline
- Cross Selling Treasury Products – Course Outline
- Option Pricing using Binomial Trees – Course Outline
- Option Pricing using Monte Carlo Simulation – Course Outline
- Quant Crash Course – Course Outline
- Selling Derivatives Products – Course Outline
- Setting Value at Risk, Stop Loss, Pre Settlement and Counterparty Limits – Course Outline
- Stress Testing – Course Outline
- Understanding N(d1) and N(d2) – Course Outline
- Pitching for Startups – Course Outline

- Learning Roadmaps

## Random Testimonial

- ~ Student Testimonials
"Concise, to the point. Very informative and very practical.”

“I loved the course!! Very interesting. Good lectures.”

“Excellent, very informative and inspiring.”

“In total awe of the way he taught…”

“Well versed with the subject and able to transmit the subject properly.”

“Excellent. If the time could be extended this would be an even better learning experience.”

Excellent teaching skills. The instructor made every effort to explain most complicated finance concepts in simplest possible ways."

**Read more testimonials »**