MN-3506 Derivatives and Risk Management

Java Python Coursework guidelines – MN-3506

Derivatives and Risk Management

Coursework Brief

This is an individual coursework, worth 40% of the module marks. You will get to have a trading account on StockTrak (an online financial trading platform). As a trader you will have $1million (virtual money) to buy and sell financial securities with, across various stock exchanges/ markets. The trading period will last for 9-weeks and you will need to compile a report reflecting on the trading experience and explaining your trading strategies as per the guidelines below.

Registering your account on StockTrak

You have to register your account on StockTrak trading simulation with a unique name. The registration link will be shared via CANVAS, and the registration period will start from Friday 17^th Feb 2023.

Financial Trading on Stocktrak

· The trading period starts on Monday 20^th Feb 2023 and will come to an end on Friday 21^st April 2023.

· The virtual money available to each student is $1,000,000.

· You are required to start trading without delay, and to continue trading regularly over the full 9-week trading period.

· You can buy and sell any financial security/contracts throughout the trading day (with 15-minute delay) on any of the exchanges (e.g. London, New York, Brussels, Frankfurt etc.) available through the trading platform. US is treated as the domestic/ local market on StockTrak.

· You can form. your own portfolio using a variety of financial securities, so that portfolio’s risk is diversified.

· The portfolio must consist of some derivative contracts to demonstrate the speculative and hedging strategies. As a guideline, at least 25% of your total trades should be in the derivative securities. You can change the construction of the portfolio at any point.

· You may use margin trading and/or short selling. The transaction fee and interest rate on the loan can be found on StockTrak.

· Stocktrak has lots of (basic to more advanced) learning resources available and you are encouraged to make use of these.

· Please see the marking rubrics for assessment.

Writing the Coursework Report

Compile a report (2000 words max.) on your trading strategies and the trading experience over the 9-week period (from 20^th Feb 2023 to 21^st April 2023). Tables, charts and references are not included in this word count.

You can be creative in writing the report and do not have to follow strict academic guidelines. For instance, there is no need for a literature review. The report should include (but not be limited to) discussion on the following:

• The portfolio composition (initial portfolio formed), investment decisions, strategies and the reasons.

• What adjustments were made to the portfolio (in terms of securities, asset classes or markets) in light of the market developments (news/information)?

• Performance of the portfolio and/or the investments forming the portfolio

• Comparison with the market (e.g. S&P 500, FTSE 100) and/ or class average

• What have you learnt? What changes you might make in the future?

• Check marking rubrics for the assessment criteria and marks allocation on page 3 of this document.

References

Academic references are not a must. However, if you have based your investment decision on market information, you need to cite the source, e.g. company announcement, govt. figures, news articles etc.

Coursework Submission Deadline

The deadline for the submission of tdai 写MN-3506 Derivatives and Risk Management he report is 2 pm on 27^th April 2023. The maximum word limit for the report is 2000 words. The tables, figures and references do not contribute to the word count.

Marking Rubrics for Coursework

Marks will not be awarded based on how much profit/loss the student has made during the trading period. But the aim should be to have a profitable portfolio