I’m a university student, studying Finance. I’ve decided that I want to become a trader, not sure about which type (stocks/commodities/forex etc).
BEFORE, someone makes a smart comment about “Trading can only be learnt by trading or on-the-job” or “Just open an account and trade”… I WILL be starting an account and trading slowly.
I need help deciding which units would be MOST beneficial to study, for a career in Trading, either for hedge funds or proprietary firms e.g. Optiver, whom I’ve heard many good things about.
If any professional traders could take a 2 minutes reading the unit descriptions below and suggest in order of importance (1-8) OR top 5 units to study; along with reasons. I would be very grateful.
Thank you in advance!
ACST201 – Financial Modelling
AFIN270 – Stochastic methods in applied finance
AFIN250 - Investments
AFIN328- Financial Risk Management
AFIN329 - Derivatives Instrument
AFIN331 - Quantitative Modelling in Applied Finance
AFIN353 - Advanced Corporate Finance
AFIN352 - Applied Portfolio Management
Financial Modelling - ACST201
This unit explores some basic concepts of finance, in particular: -price; yield; the relationship between price and yield; interest rate risk; reinvestment risk; duration and its uses; volatility; the contingent payments approach; arbitrage pricing theory; pricing forwards; futures and options.
Financial mathematics to analyse transactions involving commonly used financial instruments in the context of the markets in which they are traded.
Stochastic Methods in Applied Finance - AFIN270
This unit provides students with a more detailed insight and understanding of the valuation models introduced in earlier units and includes extensive use of Excel. The unit addresses a number of topics, within which theoretical models are developed and then explored further using Excel. These topics include random walks, martingales, ito calculus, and arbitrage.
Investments - AFIN250
The investment industry has experienced rapid change over the past three decades. Many of these changes in the investment environment are discussed in this unit. An important theme of the unit is that developed markets are near-informational-efficient - that higher expected returns only come by bearing greater investment risk. Throughout the unit a modern portfolio theory approach is applied, focussing on the implications of efficient diversification, in providing a proper measurement of risk and the risk-return relationship. The asset allocation choice is also considered in depth, as it is a primary determinant of the risk-return profile of the investment portfolio. In summary, the unit introduces the principles of valuation as applied to a broad range of asset classes including models of equity valuation, debt valuation, commodities, private equity, and alternative investments such as distressed securities and real estate.
Financial Risk Management - AFIN328
How to apply and evaluate the quantitative methods covered in the unit in analysing and managing portfolios as well as the risk arising from various financial investments. In particular, students are expected to be able to: examine and find optimal investments strategies with respect to risk and return; attain an excellent knowledge of the role and characteristics of international financial markets and institutions; understand the pricing of various financial products and how they can be used for hedging; evaluate econometric models for financial variables; and acquire an extensive knowledge on the major approaches to managing market, credit and operational risks.
Derivatives Instrument - AFIN329
This unit explores the characteristics and pricing of derivatives. The importance of the principles of hedging and arbitrage in derivative pricing, is considered. Derivatives investigated include forwards, futures, options and various structured products. In particular, the unit covers non-standard securities and numerical methods.
Quantitative Modelling in Applied Finance - AFIN331
. This unit develops the modelling skills of students, with an applied focus complementing the overall applied focus of the degree. Quantitative modelling is widely practised throughout the finance industry, including in the areas of financial statement analysis, corporate finance, and risk management. In addition to developing students modelling skills, this approach also helps to advance students' understanding of the various theoretical issues on which these models are based.
Advanced Corporate Finance - AFIN353
This unit challenges the student to consider a comprehensive set of factors that influence organisations in their payout, investment and finance decisions within a dynamic framework. The decision might reflect the personality of a CEO, the composition of competitors or expectations about fluctuations in the economy. In this sense, students need to be able to appreciate the differences between theory and practice. Further, students are encouraged to read academic and professional finance journals and the business sections in the daily press. By the end of the unit students should understand: the theoretical and practical implications of the multifaceted nature of risk; the different issues (including flexibility) to be considered, and the different approaches (including real options) available, in valuing risky projects; issues in determining capital structure; the theory and methods used in assessing the costs and benefits of mergers and acquisitions; and the link between corporate governance and finance.
Applied Portfolio Management - AFIN352
This unit provides students with the analytical skills and techniques required to effectively manage diversified portfolios of securities. The unit prepares students for asset allocation management and performance assessment of diversified portfolios. Issues relating to the management of portfolios containing options, futures and other derivatives will also be reviewed. After completing this unit students have greater knowledge for effective portfolio management and an increased awareness of potential practical problems in implementation.
Thank you for your time and advice!