The Fundamentals of Futures Trading (IBO Package)

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Syllabus

Course Title: The Fundamentals of Futures Trading: Theory, Strategies, and Applications
Course Code: FUTR 101
Semester: Fall 2025
Credits: pending
Duration: 15 Weeks

Instructor:

  • Name: Glenville Gardner
  • Email: education@3amcapital.io
  • Office Hours: Tuesdays & Thursdays 2:00 – 4:00 PM

Prerequisites:

  • Basic understanding of financial markets or introductory finance is recommended.

Course Description

This course offers an in-depth exploration of the futures markets, including their history, structure, and the strategies used by various market participants. Students will learn how to analyze futures contracts, understand market mechanics, apply hedging and speculation strategies, and use options on futures. Emphasis is placed on both theoretical frameworks and practical applications, using case studies, simulated trading exercises, and market research techniques. By the end of the course, participants will be equipped to make informed trading decisions and manage risk effectively in the futures market.

Learning Objectives

Upon completion of this course, students will be able to:

  • Explain the historical development and structure of futures markets.
  • Understand the standardization, pricing, and settlement processes of futures contracts.
  • Identify and evaluate the roles of key market participants.
  • Apply hedging and speculation strategies using futures and options.
  • Analyze market data using technical, fundamental, and sentiment analysis.
  • Manage risk using various tools and techniques tailored to futures trading.
  • Comply with regulatory and legal requirements in futures trading.
  • Demonstrate practical trading skills through simulated trading exercises and case studies.

Course Outline and Weekly Schedule

Course Outline and Weekly Schedule

Week 1: Introduction to Futures Markets

  • Overview of futures markets
  • History and development
  • Key players: Producers, Merchandisers, Hedgers, Speculators
  • Types of futures contracts (commodities, financial instruments, index futures)
  • Quiz 1: Basics of Futures Markets

Week 2: Understanding Futures Contracts

  • Standardization and contract specifications
  • Pricing and quotation mechanisms
  • Contract expiration, settlement (physical vs. cash)
  • Delivery process
  • Quiz 2: Contract Specifications and Settlement

Week 3: Market Mechanics

  • Futures exchanges (CME, CBOT, etc.)
  • Order types and execution (market, limit, stop orders)
  • Role of clearinghouses
  • Margin requirements and the mark-to-market process
  • Quiz 3: Market Mechanics

Week 4: Hedging Strategies

  • Purpose and benefits of hedging
  • Types of hedgers: Producers, consumers, merchandisers
  • Basic hedging strategies (long and short hedges)
  • Cross-hedging and basis risk
  • Quiz 4: Hedging Fundamentals

Week 5: Speculation and Trading Strategies

  • Role of speculators in the market
  • Technical vs. fundamental analysis
  • Common trading strategies: Spread trading, trend following, arbitrage
  • Risk management and position sizing
  • Quiz 5: Trading Strategies

Week 6: Options on Futures

  • Basics of options (calls and puts)
  • Option pricing and the Greeks
  • Strategies using options on futures: Covered calls, protective puts, spreads
  • Risk management with options
  • Quiz 6: Options Fundamentals

Week 7: Market Analysis and Research

  • Fundamental analysis: Supply/demand, weather, economic indicators
  • Technical analysis: Chart patterns, indicators, and trends
  • Sentiment analysis and market psychology
  • Midterm Exam: Covering Weeks 1–7

Week 8: Risk Management

  • Identifying and quantifying risk
  • Risk management tools (stop-loss orders, options)
  • Portfolio diversification and correlation
  • Stress testing and scenario analysis
  • Quiz 7: Risk Management Techniques

Week 9: Regulation and Compliance

  • Regulatory bodies (CFTC, NFA)
  • Legal framework and contract law
  • Ethical considerations and best practices
  • Reporting requirements
  • Quiz 8: Futures Market Regulation

Week 10: Case Studies and Practical Applications

  • Real-world examples of hedging and speculation
  • Simulated trading exercises
  • Analysis of historical market events and crises
  • Role-playing as different market participants
  • Assignment 1: Case Study Analysis

Week 11: Global Futures Markets

  • Comparison of U.S. and international futures markets
  • Currency and interest rate futures
  • Global economic indicators and their impact
  • Quiz 9: Global Markets

Week 12: Technology and Innovations

  • Impact of algorithmic trading and high-frequency trading
  • Use of trading platforms and software
  • Blockchain and futures contracts
  • Emerging trends in futures markets
  • Quiz 10: Technology in Futures Trading

Week 13: Advanced Topics (Optional)

  • Advanced hedging techniques
  • Portfolio management using futures
  • Exotic options and derivative products
  • Integration of futures with other asset classes
  • Assignment 2: Research Paper/Presentation on Advanced Topics

Week 14: Review and Preparation for Final Assessment

  • Summary of key concepts
  • In-class review sessions
  • Q&A and discussion of simulated trading outcomes
  • Practice Exam: Comprehensive Review

Week 15: Final Exam and Capstone Project

  • Final Exam: Comprehensive assessment covering all course material
  • Capstone Project: Presentation and report on a real-world trading strategy or simulated trading experience
  • Certificate Ceremony: Issuance of Certificate of Completion

Assessment Methods

  • Weekly Quizzes (10 Total): 30% of final grade
  • Midterm Exam (Week 7): 20% of final grade
  • Assignments/Case Studies (2 Assignments): 20% of final grade
  • Capstone Project: 10% of final grade
  • Final Exam (Week 15): 20% of final grade

Grading Scale

  • A: 90 – 100%
  • B: 80 – 89%
  • C: 70 – 79%
  • D: 60 – 69%
  • F: Below 60%

Certificate of Completion

Students who successfully complete the course with a passing grade will receive a Certificate of Completion that recognizes their understanding of futures markets, strategies, and practical applications. This certificate can be used to enhance your professional credentials.

Required Materials

  • Textbook: Options, futures and other Derivatives by John C. Hull (latest edition)
  • Supplementary Readings: Selected academic papers, industry reports, and regulatory publications (provided via the course website)
  • Software: Access to a simulated trading platform (details provided during the course)

Additional Information

  • Office Hours and Support: In-person and online office hours are available to assist with course materials and assignments.
  • Academic Integrity: All students are expected to adhere to the university’s academic integrity policies.
  • Accessibility: Any accommodations needed should be communicated to the instructor at the beginning of the semester.

Conclusion:
This course is designed to provide a comprehensive foundation in futures markets, blending theoretical knowledge with practical trading skills. Through rigorous analysis, simulations, and real-world case studies, students will gain the confidence and expertise needed to navigate the dynamic world of futures trading.

For further details or any questions regarding the syllabus, please contact the instructor at education@3amcapital.io