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Prepare for CFA Level 1: Derivatives and Risk Management

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Prepare for CFA Level 1: Derivatives and Risk Management

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Gain insight into a topic and learn the fundamentals.
Beginner level

Recommended experience

2 weeks to complete
at 10 hours a week
Flexible schedule
Learn at your own pace

Gain insight into a topic and learn the fundamentals.
Beginner level

Recommended experience

2 weeks to complete
at 10 hours a week
Flexible schedule
Learn at your own pace

What you'll learn

  • Apply pricing and valuation models for forwards, futures, and swaps using cost of carry and arbitrage frameworks

  • Analyze option value, moneyness, time value, and Greeks to evaluate derivative financial instruments in live markets

  • Build binomial valuation models and put-call parity frameworks to price European options from first principles

  • Design real-world derivative strategies for hedging, speculation, and arbitrage using futures, options, and swaps

Details to know

Shareable certificate

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Recently updated!

April 2026

Assessments

13 assignments

Taught in English

Build your subject-matter expertise

This course is part of the Prepare for CFA Level 1 Exam: Master Core Finance Concepts Specialization
When you enroll in this course, you'll also be enrolled in this Specialization.
  • Learn new concepts from industry experts
  • Gain a foundational understanding of a subject or tool
  • Develop job-relevant skills with hands-on projects
  • Earn a shareable career certificate

There are 4 modules in this course

Master financial derivatives - forwards, futures, options, swaps, and credit derivatives with the pricing models and market intuition needed for CFA Level 1 and real-world trading.

This intermediate course covers the complete derivatives curriculum: derivative instruments and market structure, forward and futures pricing, swap valuation, options models including binomial valuation, put-call parity, and advanced option strategies. Every lesson combines theory with numerical practice questions mirroring CFA Level 1 difficulty. Top skills you'll gain: β€’ Pricing forwards, futures, and swaps using cost of carry β€’ Options valuation: intrinsic value, time value, Greeks β€’ Binomial model and put-call parity from first principles β€’ Arbitrage identification and derivative risk management You'll be able to: β€’ Price and value derivative financial instruments confidently β€’ Build option strategies for hedging and speculation β€’ Identify arbitrage opportunities in derivative markets Module Highlights: M1: Derivative instruments, market structure, and arbitrage basics M2: Forward, futures, and swap pricing and valuation M3: Options pricing, Greeks, and binomial valuation models M4: Option strategies, put-call parity, and capstone application Take this course if you're preparing for CFA Level 1 derivatives, trading futures and options, or building a career in risk management and financial markets. Disclaimer: This course is an independent educational resource developed by Board Infinity and is not affiliated with, endorsed by, sponsored by, or officially associated with CFA Institute or any of its subsidiaries or affiliates. This course is not an official preparation material of CFA Institute. All trademarks, service marks, and company names mentioned are the property of their respective owners and are used for identification purposes only.

This module introduces the fundamentals of derivatives, including their definitions, underlying assets, and market structures. Learners explore the key categories of derivatives such as forwards, futures, swaps, options, and credit derivatives while examining how these instruments function in financial markets. The module also analyzes derivative benefits, risks, and the uses of derivatives by both issuers and investors.

What's included

16 videos5 assignments1 plugin

16 videosβ€’Total 181 minutes
  • Introductionβ€’17 minutes
  • Definition and Features of a Derivativeβ€’17 minutes
  • Derivative Underlyingsβ€’15 minutes
  • Derivative Marketsβ€’11 minutes
  • Forwards, Futures, and Swapsβ€’8 minutes
  • Futuresβ€’10 minutes
  • Swapsβ€’7 minutes
  • Optionsβ€’17 minutes
  • Credit derivativesβ€’14 minutes
  • Derivative Benefitsβ€’12 minutes
  • Derivative Risksβ€’9 minutes
  • Issuer Use of Derivativesβ€’6 minutes
  • Investor Use of Derivativesβ€’8 minutes
  • Arbitrageβ€’13 minutes
  • Replicationβ€’6 minutes
  • Costs and Benefits of owning the underlyingβ€’13 minutes
5 assignmentsβ€’Total 180 minutes
  • Practice Quiz : β€” Derivative Featuresβ€’30 minutes
  • Practice Quiz : β€” Forward Commitment and Contingent Claimsβ€’30 minutes
  • Practice Quiz : β€” Derivative Benefits, Risks, and Issuer and Investor Usesβ€’30 minutes
  • Practice Quiz : - Arbitrage, Replication, and the Cost of Carryβ€’30 minutes
  • Graded Quiz : β€” Derivative Instruments, Features, and Derivative Marketβ€’60 minutes
1 pluginβ€’Total 5 minutes
  • Quick Course Check-Inβ€’5 minutes

This module focuses on the pricing and valuation mechanisms used for forward contracts, futures contracts, and interest rate swaps. Learners examine pricing frameworks, mark-to-market valuation processes, and the differences between forwards and futures contracts. The module also explores the impact of interest rates, market structure, and central clearing on derivative pricing.

What's included

8 videos3 assignments

8 videosβ€’Total 80 minutes
  • Introductionβ€’7 minutes
  • Pricing and Valuation of Forward Contractsβ€’11 minutes
  • Pricing and Valuation of Interest Rate Forward Contractsβ€’15 minutes
  • Pricing of Futures Contracts at Inceptionβ€’9 minutes
  • MTM Valuation: Forwards versus Futuresβ€’8 minutes
  • Interest Rate Futures versus Forward Contractsβ€’7 minutes
  • Effect of Central Clearing of OTC Derivativesβ€’10 minutes
  • Swap Values and Pricesβ€’14 minutes
3 assignmentsβ€’Total 120 minutes
  • Practice Quiz : β€” Pricing and Valuation of Forward Contractsβ€’30 minutes
  • Practice Quiz : β€” Navigating Interfaces & Core Featuresβ€’30 minutes
  • Graded Quiz : β€” Pricing and Valuation of Forward Contracts and Swapsβ€’60 minutes

This module introduces option valuation principles and examines the factors influencing option prices. Learners explore concepts such as moneyness, intrinsic value, time value, and arbitrage relationships. The module also introduces the binomial model and risk-neutral valuation techniques used to price European options.

What's included

10 videos3 assignments

10 videosβ€’Total 88 minutes
  • Option Value relative to the Underlying Spot Priceβ€’12 minutes
  • Option Exercise Valueβ€’7 minutes
  • Option Moneynessβ€’9 minutes
  • Option Time Valueβ€’7 minutes
  • Replicationβ€’6 minutes
  • Factors Affecting Option Valueβ€’10 minutes
  • Binomial Valuationβ€’8 minutes
  • The Binomial Modelβ€’8 minutes
  • Pricing a European Call Option *β€’13 minutes
  • Risk Neutralityβ€’8 minutes
3 assignmentsβ€’Total 120 minutes
  • Practice Quiz : β€” Pricing and Valuation of Optionsβ€’30 minutes
  • Practice Quiz : β€” Valuing a Derivative Using a One-Period Binomial Modelβ€’30 minutes
  • Graded Quiz :- Pricing and Valuation of Futuresβ€’60 minutes

This module examines the relationship between option prices and underlying assets through put–call parity and replication strategies. Learners explore how parity relationships help identify arbitrage opportunities and construct synthetic positions. The module also analyzes applications of put–call parity in option strategies and firm valuation contexts.

What's included

4 videos2 assignments

4 videosβ€’Total 39 minutes
  • Put–Call Parityβ€’13 minutes
  • Option Strategies Based on Put–Call Parityβ€’10 minutes
  • Put–Call Parity and Option Applicationsβ€’6 minutes
  • Option Put–Call Parity Applications: Firm Valueβ€’10 minutes
2 assignmentsβ€’Total 90 minutes
  • Practice Quiz : β€” Option Replication- Put Call Parityβ€’30 minutes
  • Graded Quiz : β€” Option Replication- Put Call Parityβ€’60 minutes

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Instructor

Board Infinity
261 Coursesβ€’428,749 learners

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Frequently asked questions

No prior derivatives experience is required, this course is designed for intermediate learners who understand basic financial concepts like time value of money and interest rates, but have never studied futures, options, or swaps formally. We build every concept from the ground up with definitions, worked examples, and numerical practice questions at each step.

This course covers the complete derivatives curriculum aligned with CFA Level 1: forwards, futures, swaps, options (calls and puts), credit derivatives, binomial valuation, put-call parity, arbitrage, cost of carry, and option strategies. Every module is structured around CFA-style theory and numerical questions, making it directly applicable for CFA Level 1 exam preparation in the derivatives topic area.

No specialist software is required. All concepts are taught through video lessons, worked numerical examples, and practice quiz sets accessible directly on the Coursera platform. A scientific calculator or spreadsheet (Excel/Google Sheets) is useful for pricing exercises in Modules 2 and 3, particularly for forward pricing, binomial valuation, and put-call parity calculations.

Each lesson includes a Practice Quiz (theory + numerical questions at easy difficulty) and module-level Graded Quizzes at medium difficulty, structured exactly like CFA Level 1 item sets. Modules 2, 3, and 4 also include assignment-based numerical problems on forward pricing, option valuation, and derivative strategy construction, with a capstone assignment in Module 4.

The course is designed for 4 weeks of study at 3–4 hours per week, manageable alongside work or college. Total content is approximately 16 hours of video, quizzes, and assignments. You can learn entirely at your own pace, revisit any lesson or numerical example as many times as needed, and most learners complete it in 4–5 weeks.

Derivatives in the stock market are used for hedging equity positions (e.g. buying put options to protect against a stock price fall), speculation on price movements, and arbitrage between spot and futures prices. This course covers all three uses across Modules 1–4, including real-world applications of futures on equity indices, interest rate swaps, and option strategies like covered calls, protective puts, and straddles.

Module 4's capstone assignment, building a derivative strategy for a real-world market scenario, directly mirrors the type of case questions asked in interviews at hedge funds, investment banks, and asset management firms. You'll be able to explain pricing logic for forwards, futures, and options, discuss arbitrage conditions, and walk through put-call parity and binomial valuation confidently in technical interviews.

Derivatives knowledge supports roles in equity research, fixed income, risk management, structured products, and trading at firms like Goldman Sachs, JP Morgan, ICICI Securities, and Edelweiss. In India, entry-level derivatives analyst or risk analyst roles typically offer β‚Ή5–10 LPA, with mid-level roles reaching β‚Ή15–25 LPA at leading financial institutions. CFA Level 1 clearance combined with derivatives skills significantly accelerates this trajectory.

Absolutely, this is fully self-paced with no live sessions or fixed timings. Start anytime, pause when needed, and revisit any lesson, video, or practice question set as many times as needed. This is especially useful when revising forward pricing formulas, binomial model mechanics, or put-call parity applications in the weeks before your CFA Level 1 exam date.

Yes, the course is designed to be flexible and manageable for both students and working professionals. With a recommended pace of 3–4 hours per week and fully self-paced access, you can easily balance learning alongside college, internships, or a full-time job.

Yes, you will receive a shareable certificate of completion from Coursera once you successfully complete all graded quizzes and assignments. This certificate can be added to your resume or LinkedIn profile to showcase your derivatives knowledge.

This course stands out through its CFA Level 1 alignment, strong focus on numerical problem-solving, and structured progression from fundamentals to advanced applications. It combines theory, CFA-style questions, real-world use cases, and a capstone project, making it both exam-focused and job-relevant.

To access the course materials, assignments and to earn a Certificate, you will need to purchase the Certificate experience when you enroll in a course. You can try a Free Trial instead, or apply for Financial Aid. The course may offer 'Full Course, No Certificate' instead. This option lets you see all course materials, submit required assessments, and get a final grade. This also means that you will not be able to purchase a Certificate experience.

When you enroll in the course, you get access to all of the courses in the Specialization, and you earn a certificate when you complete the work. Your electronic Certificate will be added to your Accomplishments page - from there, you can print your Certificate or add it to your LinkedIn profile.

Yes. In select learning programs, you can apply for financial aid or a scholarship if you can’t afford the enrollment fee. If fin aid or scholarship is available for your learning program selection, you’ll find a link to apply on the description page.

Financial aid available,