Basics of derivatives markets, types of derivatives and traders; Forward markets; Futures markets, mechanisms, margin accounts, marking to market, hedging strategies and risk management using futures, interest rate futures; Valuation of forwards and futures; Swaps, interest rate swaps and credit default swaps; Mechanism of options markets, payoffs, properties and trading strategies; Option pricing using binomial model, risk neutral valuation; Option pricing using the black-scholes-merton model; Greeks; Exotic options; Credit derivatives.