AEM 6410 - Commodity Futures and Options

Spring. 4 credits. Letter grades only.

Enrollment limited to: registration as a graduate student in MS, MPS or PhD. Co-meets with AEM 4210.

C. G. Turvey.

This course focuses on markets for agricultural futures and options contracts. Lectures address hedging and risk management with futures and options as well as the structure of risk and random walks. Graduate students registered in AEM 6410 will have an additional weekly seminar discussing key papers in the theories and practice of futures and options applied to agriculture.

Outcome 1: Explain the role of futures, options and other derivatives in the pricing of agricultural products.

Outcome 2: Price forwards and options (“pricing models”).

Outcome 3: Explain the fundamental probabilities and dynamics describing asset risk.

Outcome 4: Develop and understand hedging and trading strategies with derivatives.

Outcome 5: Use derivatives to reallocate risk.

Outcome 6: Use derivatives for corporate risk management.

Outcome 7: Explain the financial crisis arose and how to prevent it.

Outcome 8: Explain how to design and value financially engineered products including exotic options and weather derivatives.