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Unit outline_

FINC3014: Trading and Dealing in Security Markets

Semester 2, 2023 [Normal day] - Camperdown/Darlington, Sydney

This unit is concerned with the processes which turn orders into trades in securities markets, and the forces which mould and affect both order flow and order execution. The unit provides an introduction to some fundamental ideas about market design and structure. At the end of the unit, students should be able to understand (1) how the international markets for foreign exchange, swaps, bonds and equities are organised, (2) how trading is conducted in these markets and how these transactions are cleared, (3) how the markets are regulated, if they are supervised and what risks different counterparties face in these markets. The unit aims to equip students to independently analyse international investment and financing alternatives and to estimate expected returns and costs taking into account liquidity risk, price volatility and credit risk.

Unit details and rules

Academic unit Finance
Credit points 6
Prerequisites
? 
FINC2012
Corequisites
? 
None
Prohibitions
? 
None
Assumed knowledge
? 

None

Available to study abroad and exchange students

Yes

Teaching staff

Coordinator Joakim Westerholm, joakim.westerholm@sydney.edu.au
Lecturer(s) Joakim Westerholm, joakim.westerholm@sydney.edu.au
Type Description Weight Due Length
Supervised exam
? 
Final exam
Closed book exam with multiple-choice questions and extended responses
50% Formal exam period 1.5 hours
Outcomes assessed: LO1 LO2 LO3
Supervised test
? 
Mid-semester exam
Closed book multiple-choice questions
25% Week 08
Due date: 17 Sep 2023 at 13:00
1 hour
Outcomes assessed: LO1 LO2 LO3
Assignment group assignment Trading strategy report
Trading strategy report that is shaped by experiences learned from RIT
25% Week 11
Due date: 20 Oct 2023 at 23:00

Closing date: 03 Nov 2022
6 to 8 A4 pages
Outcomes assessed: LO1 LO2 LO3 LO4 LO5
group assignment = group assignment ?

Assessment summary

  • Mid-semester exam: The mid-term exam will consist of multiple-choice questions (MCQs). This exam will cover all topics covered up to the exam date (Weeks 1 to 6), including both lecture notes and tutorial content. Feedback will be provided on your MCQ results after the closing date.
  • Trading assignment: Students will be required to form a group that writes a trading strategy report, which will be shaped by learning experiences from Rotman Interactive Trader (RIT).
  • Final exam: The final exam will consist of multiple-choice questions (MCQs) and extended responses covering the entirety of the unit. 

Detailed information for each assessment will be provided on Canvas.

Assessment criteria

The University awards common result grades, set out in the Coursework Policy 2014 (Schedule 1).

As a general guide, a high distinction indicates work of an exceptional standard, a distinction a very high standard, a credit a good standard, and a pass an acceptable standard.

Result name

Mark range

Description

High distinction

85 - 100

Awarded when you demonstrate the learning outcomes for the unit at an exceptional standard, as defined by grade descriptors or exemplars outlined by your faculty or school. 

Distinction

75 - 84

Awarded when you demonstrate the learning outcomes for the unit at a very high standard, as defined by grade descriptors or exemplars outlined by your faculty or school.

Credit

65 - 74

Awarded when you demonstrate the learning outcomes for the unit at a good standard, as defined by grade descriptors or exemplars outlined by your faculty or school.

Pass

50 - 64

Awarded when you demonstrate the learning outcomes for the unit at an acceptable standard, as defined by grade descriptors or exemplars outlined by your faculty or school. 

Fail

0 - 49

When you don’t meet the learning outcomes of the unit to a satisfactory standard.

For more information see guide to grades.

Late submission

In accordance with University policy, these penalties apply when written work is submitted after 11:59pm on the due date:

  • Deduction of 5% of the maximum mark for each calendar day after the due date.
  • After ten calendar days late, a mark of zero will be awarded.

Academic integrity

The Current Student website provides information on academic integrity and the resources available to all students. The University expects students and staff to act ethically and honestly and will treat all allegations of academic integrity breaches seriously.

We use similarity detection software to detect potential instances of plagiarism or other forms of academic integrity breach. If such matches indicate evidence of plagiarism or other forms of academic integrity breaches, your teacher is required to report your work for further investigation.

Use of generative artificial intelligence (AI) and automated writing tools

You may only use generative AI and automated writing tools in assessment tasks if you are permitted to by your unit coordinator. If you do use these tools, you must acknowledge this in your work, either in a footnote or an acknowledgement section. The assessment instructions or unit outline will give guidance of the types of tools that are permitted and how the tools should be used.

Your final submitted work must be your own, original work. You must acknowledge any use of generative AI tools that have been used in the assessment, and any material that forms part of your submission must be appropriately referenced. For guidance on how to acknowledge the use of AI, please refer to the AI in Education Canvas site.

The unapproved use of these tools or unacknowledged use will be considered a breach of the Academic Integrity Policy and penalties may apply.

Studiosity is permitted unless otherwise indicated by the unit coordinator. The use of this service must be acknowledged in your submission as detailed on the Learning Hub’s Canvas page.

Outside assessment tasks, generative AI tools may be used to support your learning. The AI in Education Canvas site contains a number of productive ways that students are using AI to improve their learning.

Simple extensions

If you encounter a problem submitting your work on time, you may be able to apply for an extension of five calendar days through a simple extension.  The application process will be different depending on the type of assessment and extensions cannot be granted for some assessment types like exams.

Special consideration

If exceptional circumstances mean you can’t complete an assessment, you need consideration for a longer period of time, or if you have essential commitments which impact your performance in an assessment, you may be eligible for special consideration or special arrangements.

Special consideration applications will not be affected by a simple extension application.

Using AI responsibly

Co-created with students, AI in Education includes lots of helpful examples of how students use generative AI tools to support their learning. It explains how generative AI works, the different tools available and how to use them responsibly and productively.

WK Topic Learning activity Learning outcomes
Week 01 Introduction to UoS structure, Financial trading basics, Trading simulator manuals for Rotman Interactive Trader RIT and Interactive Brokers IB Computer laboratory (2 hr) LO4 LO5
Financial trading basics exercises, consultation Tutorial (1 hr) LO1 LO2 LO3
Week 02 The trading industry, The economics of trading, Real-time online trading simulator Computer laboratory (2 hr) LO1 LO2 LO3 LO4
The trading industry and economics of trading exercises, consultation Tutorial (1 hr) LO4 LO5
Week 03 Large traders and market impact costs, Real-time online trading simulator Computer laboratory (2 hr) LO1 LO2 LO3 LO4 LO5
Large traders and market impact costs exercises, consultation Tutorial (1 hr) LO1 LO2 LO4 LO5
Week 04 Dealer markets and market making, Derivative securities, Real time online trading simulation Computer laboratory (2 hr) LO1 LO2 LO3
Dealer markets, market making, and derivative securities exercises, consultation Tutorial (1 hr) LO1 LO2 LO4
Week 05 Algorithmic trading, Real-time online trading simulator Computer laboratory (2 hr) LO1 LO2 LO3
Algorithmic trading exercises and coding laboratory, consultation Tutorial (1 hr) LO5
Week 06 Behaviroral finance and trading. Real-time online trading simulator Computer laboratory (2 hr) LO1 LO2 LO3 LO4 LO5
Behavioral finance exercises and coding laboratory, consultation Tutorial (1 hr) LO4 LO5
Week 07 Evaluating markets and investments, Real-time online trading simulator Computer laboratory (2 hr) LO1 LO2 LO3 LO4 LO5
Evaluation exercises and coding laboratory, consultation Tutorial (1 hr) LO4 LO5
Week 08 Mid-term exam, (Tutorials will be held this week, where assignment queries will be addressed) Computer laboratory (2 hr) LO1 LO2 LO3
Assignment consultation session Tutorial (1 hr) LO1 LO2 LO3 LO4
Week 09 Arbitrage, Real-time online trading simulator Computer laboratory (2 hr) LO1 LO2 LO3
Arbitrage exercises, Coding laboratory Tutorial (1 hr) LO4 LO5
Week 10 Digital finance and AI, Real-time online trading simulator Computer laboratory (2 hr) LO1 LO2 LO3 LO4 LO5
Digital finance and AI exercises, Coding laboratory Tutorial (1 hr) LO3 LO4 LO5
Week 11 Distressed markets, and market disclocations Computer laboratory (2 hr) LO1 LO2 LO3
Preparation for Rotman International Trading Competition, consultation Tutorial (1 hr) LO4 LO5
Week 12 Rotman international trading competition [RITC] heats, Demonstrate what you have learned for a place on the Sydney trading team. Computer laboratory (2 hr) LO1 LO2 LO3
RITC results evaluation and reflection Tutorial (1 hr) LO4 LO5
Week 13 Review session and final exam preparation. Computer laboratory (2 hr) LO1 LO2 LO3 LO4 LO5
UoS revision exercises and final exam preparation. Tutorial (1 hr)  

Attendance and class requirements

Lecture recordings: All lectures and seminars are recorded and will be available on Canvas for student use. Please note the Business School does not own the system and cannot guarantee that the system will operate or that every class will be recorded. Students should ensure they attend and participate in all classes.

Study commitment

Typically, there is a minimum expectation of 1.5-2 hours of student effort per week per credit point for units of study offered over a full semester. For a 6 credit point unit, this equates to roughly 120-150 hours of student effort in total.

Required readings

All readings for this unit can be accessed through the Library eReserve, available on Canvas.

  • Financial Trading and Investing, by John L. Teall, Academic Press.

Learning outcomes are what students know, understand and are able to do on completion of a unit of study. They are aligned with the University's graduate qualities and are assessed as part of the curriculum.

At the completion of this unit, you should be able to:

  • LO1. identify the processes by which security prices come about, why trading occurs and how trading is conducted
  • LO2. discuss how financial decisions by corporations turn into trades that move prices in exchanges
  • LO3. connect the theory of corporations to the visible financial market news in the media
  • LO4. utilise your own trading strategies within practice and evaluate them with the aid of a real-time trading simulator
  • LO5. build algorithms to execute trades automatically.

Graduate qualities

The graduate qualities are the qualities and skills that all University of Sydney graduates must demonstrate on successful completion of an award course. As a future Sydney graduate, the set of qualities have been designed to equip you for the contemporary world.

GQ1 Depth of disciplinary expertise

Deep disciplinary expertise is the ability to integrate and rigorously apply knowledge, understanding and skills of a recognised discipline defined by scholarly activity, as well as familiarity with evolving practice of the discipline.

GQ2 Critical thinking and problem solving

Critical thinking and problem solving are the questioning of ideas, evidence and assumptions in order to propose and evaluate hypotheses or alternative arguments before formulating a conclusion or a solution to an identified problem.

GQ3 Oral and written communication

Effective communication, in both oral and written form, is the clear exchange of meaning in a manner that is appropriate to audience and context.

GQ4 Information and digital literacy

Information and digital literacy is the ability to locate, interpret, evaluate, manage, adapt, integrate, create and convey information using appropriate resources, tools and strategies.

GQ5 Inventiveness

Generating novel ideas and solutions.

GQ6 Cultural competence

Cultural Competence is the ability to actively, ethically, respectfully, and successfully engage across and between cultures. In the Australian context, this includes and celebrates Aboriginal and Torres Strait Islander cultures, knowledge systems, and a mature understanding of contemporary issues.

GQ7 Interdisciplinary effectiveness

Interdisciplinary effectiveness is the integration and synthesis of multiple viewpoints and practices, working effectively across disciplinary boundaries.

GQ8 Integrated professional, ethical, and personal identity

An integrated professional, ethical and personal identity is understanding the interaction between one’s personal and professional selves in an ethical context.

GQ9 Influence

Engaging others in a process, idea or vision.

Outcome map

Learning outcomes Graduate qualities
GQ1 GQ2 GQ3 GQ4 GQ5 GQ6 GQ7 GQ8 GQ9

This section outlines changes made to this unit following staff and student reviews.

Since this unit was last offered, student feedback is provided continuously, and we aim to respond to student queries within 1-2 business days.

Disclaimer

The University reserves the right to amend units of study or no longer offer certain units, including where there are low enrolment numbers.

To help you understand common terms that we use at the University, we offer an online glossary.