Ultimate Investment Banking Course

The risk department catalogs and evaluates the bank's quantitative risks, reports risk to traders, and develops tools to automate value at risk and the stress test, appealing to mathematics enthusiasts.

Explore the compliance department's three duties—prevention, identification, and control—ensuring banks follow laws, identify and resolve risks, and monitor exposure to avoid trading outside authorized limits and Basel III regulations.

Operate as the middle office to record front office deals and book them into bank systems, then match with back office confirmations to prevent money laundering.

Master the back office's operational and technological tasks that support trading, including record maintenance, settlements, it services, and accounting, and explore outsourcing options and career moves toward the front office.

Differentiate quantity and nominal value, then explain price conversion and liquidity versus volume. Demonstrate order book dynamics with bids, asks, spreads, and matched trades.

See how equities represent a small company share with voting rights. Prices reflect supply, demand, and macroeconomic news; market cap equals price times shares, with dividends and capital growth.

Learn how the fixed income market functions, where governments and companies issue bonds to raise funds, offering known returns through coupons, while carrying default risk and greater safety than equities.

Explore volatility as a risk measure and price amplitude tied to market swings, and learn to estimate daily and annualized volatility from historical data using daily returns and standard deviation.

Explore rates from simple to continuous compound and how time value drives pricing. Compute present value and compare simple, periodic, and discounted rates for option pricing and yield curves.

Explore how the yield curve links interest rates to debt maturities using zero coupon bonds. Compare normal and inverted curves as signals of economic growth or recession.

Explore futures and forwards, learn how forward price and expiration drive pricing, and see how central clearinghouses support standardized contracts in derivatives.

Learn how over-the-counter swaps work, exchanging fixed and floating rates in a plain vanilla interest rate swap, demonstrated with a simple year-long fixed 8% vs labor plus 2% example.

Explore put-call parity for European options with the same strike and maturity. The relation c plus pv(k) equals p plus s shows prices align and enable arbitrage.

Analyze long and short call spreads and put spreads to see how buying and selling options at different strikes shape payoffs, risk, and capped profits.

Explore the butterfly strategy (butterfly spread), an options-based auction approach that uses three strike prices to profit from low volatility, with call and put constructions and limited risk.

Explore the greeks, focusing on delta, the option's price sensitivity to the underlying, its role in delta hedging, and how delta relates to finishing in the money, with gamma introduced.

Gamma measures the rate of change in delta as the underlying price moves, the second derivative that applies to both call and put options.

Explore how rho measures a derivative's sensitivity to changes in the risk-free rate, with a call option example showing gains as rates rise and puts falling.

Understand theta, the time decay of option value, and how a daily decline is computed as tomorrow's price minus today, illustrated with a $10 call in five days.

Estimate sigma by testing values in the Black-Scholes model to match the market option price. Implied volatility reflects market expectations for the remaining life of an option, unlike historical volatility.

Explore volatility skew and volatility smile by plotting implied volatility across strikes, contrasting how puts and calls price differently under the Black-Scholes framework.

Convexity measures how bond price responds to large interest rate changes by the second derivative, showing how duration changes and guiding hedges with derivatives to reduce portfolio risk.