The Black-Scholes Model: For Proprietary Trading from edX

This course is organized into three stages; beginners, intermediate, and professional.

The beginner’s level (Section 1), using a simple binomial model, explains why you can make money using what you have learned about the Black-Scholes theory in a basic finance course. This is sufficient to use for a personal winning experience.

At the intermediate level (Sections 2-3), we review the Black-Scholes model in an alternative way as a preparation for more advanced applications. We give closed-form solutions for futures and European options in Section 3. Especially futures formula is general and can be used even when the underlying has jumps in the valuation process.

At the professional level (Section 4), it is not possible to lay down the entire propriety system design in a single lecture. We point in the direction of the core design.

What you'll learn

Use the Black-Scholes model professionally.
Use the simple binomial model, and price an option precisely fitting your hedging requirements, the core idea for a layperson.
Design concepts needed for proprietary trading of sophisticated tailor-made derivative products using the Black-Scholes model and multi-risk-factors extension, used for professionals.

What's inside

Learning objectives

Use the black-scholes model professionally.
Use the simple binomial model, and price an option precisely fitting your hedging requirements, the core idea for a layperson.

Design concepts needed for proprietary trading of sophisticated tailor-made derivative products using the black-scholes model and multi-risk-factors extension, used for professionals.

Use the black-scholes model professionally.
Use the simple binomial model, and price an option precisely fitting your hedging requirements, the core idea for a layperson.
Design concepts needed for proprietary trading of sophisticated tailor-made derivative products using the black-scholes model and multi-risk-factors extension, used for professionals.

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Suitable for laypeople in finance who want to make money using the Black-Scholes theory learned in a basic finance course

Provides a solid foundation for intermediate learners in finance, preparing them for advanced applications of the Black-Scholes model

Taught by Daisuke Nakazato, who has a strong reputation in the field of finance

Covers advanced concepts, such as multi-risk-factors extension, used by professionals in proprietary trading

Involves hands-on practice with the binomial model to help learners apply the concepts more effectively

Requires learners to have a basic understanding of the Black-Scholes theory, which may pose a barrier for complete beginners

Career center

Learners who complete The Black-Scholes Model: For Proprietary Trading will develop knowledge and skills that may be useful to these careers:

Quantitative Analyst

Quantitative Analysts (Quants) develop and use mathematical and statistical models to analyze financial data and make trading decisions. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge to succeed in this role. The course will provide you with a deep understanding of the Black-Scholes model and how it is used to price options. Additionally, the course will provide you with the skills you need to develop and use other quantitative models for financial analysis.

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Financial Analyst

Financial Analysts are responsible for evaluating and making recommendations on investments. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge necessary to succeed in this role. The course will help you understand how to use the Black-Scholes model to price options, which is a key skill for Financial Analysts. Additionally, the course will provide you with a deep understanding of the financial markets and how they operate. This knowledge will be invaluable in your role as a Financial Analyst.

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Portfolio Manager

Portfolio Managers are responsible for managing investment portfolios for individuals and institutions. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge necessary to succeed in this role. The course will help you understand how to use the Black-Scholes model to evaluate and select options for your portfolio. Additionally, the course will provide you with a deep understanding of the financial markets and how they operate. This knowledge will be invaluable in your role as a Portfolio Manager.

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Hedge Fund Manager

Hedge Fund Managers are responsible for managing investment portfolios for high-net-worth individuals and institutions. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge necessary to succeed in this role. The course will help you understand how to use the Black-Scholes model to evaluate and select options for your portfolio. Additionally, the course will provide you with a deep understanding of the financial markets and how they operate. This knowledge will be invaluable in your role as a Hedge Fund Manager.

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Risk Manager

Risk Managers are responsible for assessing and managing financial risks for companies. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge necessary to succeed in this role. The course will help you understand how to use the Black-Scholes model to measure and manage risk. Additionally, the course will provide you with a deep understanding of the financial markets and how they operate. This knowledge will be invaluable in your role as a Risk Manager.

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Mathematician

Mathematicians use mathematical theories and techniques to solve problems in a variety of fields, including finance. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge necessary to succeed in this role. The course will provide you with a deep understanding of the Black-Scholes model and its applications in the financial markets. Additionally, the course will provide you with the mathematical skills you need to develop and use other quantitative models.

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Trader

Traders buy and sell securities for their own account or for the account of their clients. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge necessary to succeed in this role. The course will help you understand how to use the Black-Scholes model to price and trade options. Additionally, the course will provide you with a deep understanding of the financial markets and how they operate. This knowledge will be invaluable in your role as a Trader.

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Data Scientist

Data Scientists use data to solve problems and make decisions. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge necessary to succeed in this role. The course will provide you with a deep understanding of the Black-Scholes model and how it is used to analyze financial data. Additionally, the course will provide you with the data science skills you need to collect, clean, and analyze data.

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Actuary

Actuaries assess and manage financial risks for insurance companies and other financial institutions. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge necessary to succeed in this role. The course will help you understand how to use the Black-Scholes model to measure and manage risk. Additionally, the course will provide you with a deep understanding of the financial markets and how they operate. This knowledge will be invaluable in your role as an Actuary.

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Financial Advisor

Financial Advisors help individuals and families with their financial planning needs. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge to succeed in this role. The course will help you understand how to use the Black-Scholes model to advise your clients on investment decisions. Additionally, the course will provide you with a deep understanding of the financial markets and how they operate. This knowledge will be invaluable in your role as a Financial Advisor.

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Corporate Finance Associate

Corporate Finance Associates are responsible for analyzing and advising on financial transactions for companies. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge necessary to succeed in this role. The course will help you understand how to use the Black-Scholes model to evaluate and select options for your clients. Additionally, the course will provide you with a deep understanding of the financial markets and how they operate. This knowledge will be invaluable in your role as a Corporate Finance Associate.

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Investment Banker

Investment Bankers help companies raise capital and advise them on financial transactions. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge necessary to succeed in this role. The course will help you understand how to use the Black-Scholes model to evaluate and select options for your clients. Additionally, the course will provide you with a deep understanding of the financial markets and how they operate. This knowledge will be invaluable in your role as an Investment Banker.

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Economist

Economists study how economies work and how they affect people's lives. The Black-Scholes Model: For Proprietary Trading course would provide you with the skills and knowledge necessary to succeed in this role. The course will help you understand how to use the Black-Scholes model to analyze economic data and forecast economic trends. Additionally, the course will provide you with a deep understanding of the financial markets and how they operate. This knowledge will be invaluable in your role as an Economist.

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Software Engineer

Software Engineers design, develop, and maintain software applications. The Black-Scholes Model: For Proprietary Trading course may be useful for you in this role if you are interested in developing software applications for the financial industry. The course will provide you with a deep understanding of the Black-Scholes model and how it is used to analyze financial data. Additionally, the course will provide you with the software engineering skills you need to design and develop robust and efficient applications.

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Accountant

Accountants prepare and maintain financial statements for businesses and organizations. The Black-Scholes Model: For Proprietary Trading course may be useful for you in this role if you are interested in working in the financial industry. The course will provide you with a basic understanding of the Black-Scholes model and how it is used to price options. Additionally, the course will provide you with the accounting skills you need to prepare and maintain financial statements.

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