Unit outline_

FINC3014: Trading and Dealing in Security Markets

Semester 2, 2025 [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 Yingdong Mao, yingdong.mao@sydney.edu.au
The census date for this unit availability is 1 September 2025
Type Description Weight Due Length Use of AI
Written exam
? 
Final exam
Closed book exam with multiple-choice questions and extended responses
50% Formal exam period 1.5 hours AI prohibited
Outcomes assessed: LO1 LO2 LO3
Written test
? 
Mid-semester exam
Closed book multiple-choice questions
25% Week 07
Due date: 20 Sep 2025 at 18:10
1 hour AI prohibited
Outcomes assessed: LO1 LO2 LO3
Written work group assignment Trading strategy report
Report on a real market trading simulation
25% Week 11
Due date: 26 Oct 2025 at 23:59

Closing date: 05 Nov 2025
6 to 8 A4 pages AI allowed
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 sydney.edu.au/students/guide-to-grades.

For more information see guide to grades.

Use of generative artificial intelligence (AI)

You can use generative AI tools for open assessments. Restrictions on AI use apply to secure, supervised assessments used to confirm if students have met specific learning outcomes.

Refer to the assessment table above to see if AI is allowed, for assessments in this unit and check Canvas for full instructions on assessment tasks and AI use.

If you use AI, you must always acknowledge it. Misusing AI may lead to a breach of the Academic Integrity Policy.

Visit the Current Students website for more information on AI in assessments, including details on how to acknowledge its use.

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 University expects students to act ethically and honestly and will treat all allegations of academic integrity breaches seriously.

Our website provides information on academic integrity and the resources available to all students. This includes advice on how to avoid common breaches of academic integrity. Ensure that you have completed the Academic Honesty Education Module (AHEM) which is mandatory for all commencing coursework students

Penalties for serious breaches can significantly impact your studies and your career after graduation. It is important that you speak with your unit coordinator if you need help with completing assessments.

Visit the Current Students website for more information on AI in assessments, including details on how to acknowledge its use.

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.

Support for students

The Support for Students Policy reflects the University’s commitment to supporting students in their academic journey and making the University safe for students. It is important that you read and understand this policy so that you are familiar with the range of support services available to you and understand how to engage with them.

The University uses email as its primary source of communication with students who need support under the Support for Students Policy. Make sure you check your University email regularly and respond to any communications received from the University.

Learning resources and detailed information about weekly assessment and learning activities can be accessed via Canvas. It is essential that you visit your unit of study Canvas site to ensure you are up to date with all of your tasks.

If you are having difficulties completing your studies, or are feeling unsure about your progress, we are here to help. You can access the support services offered by the University at any time:

Support and Services (including health and wellbeing services, financial support and learning support)
Course planning and administration
Meet with an Academic Adviser

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, Assumed Knowledge and Material for Refreshing and Catching up. Readings: Introduction, pages 1-13 Foucault et. al., (2023) Lecture (2 hr) LO4 LO5
Financial Trading Basics exercises, Consultation Tutorial (1 hr) LO1 LO2 LO3
Week 02 Trading Mechanics and Market Structure (Chapter 1 Foucault et al., 2023) Trading Simulator Practice: Trading Mechanics Lecture (2 hr) LO1 LO2 LO3 LO4
Trading Mechanics and Market Structure Exercises, Consultation Tutorial (1 hr) LO1 LO2 LO3
Week 03 Measuring Liquidity (Chapter 2 Foucault et al., 2023) Trading Simulator Practice: Trading and Liquidity Lecture (2 hr) LO1 LO2 LO3 LO4 LO5
Measuring Liquidity Exercises, Consultation Tutorial (1 hr) LO1 LO2 LO4 LO5
Week 04 Order Flow, Liquidity, and Security Price Dynamics (Chapter 3 Foucault et al., 2023) Trading Simulator Practice: Order Flow, and Security Pricing. Lecture (2 hr) LO1 LO2 LO3
Order Flow, Liquidity, and Security Price Dynamics exercises, Consultation Tutorial (1 hr) LO1 LO2 LO4
Week 05 Trade Size and Market Depth (Chapter 4 Foucault et al., 2023) Trading Simulator Practice: Order Flow, and Security Pricing. Lecture (2 hr) LO1 LO2 LO3
Trade Size and Market Depth exercisesy, Consultation Tutorial (1 hr) LO1 LO2 LO3 LO5
Week 06 Estimating the Determinants of Market Illiquidity (Chapter 5 Foucault et al., 2023) Trading Simulator Practice: Determinants of Market Illiquidity. Lecture (2 hr) LO1 LO2 LO3 LO4 LO5
Determinants of Market Illiquidity, Consultation Tutorial (1 hr) LO4 LO5
Week 07 The Impact of Behavioral Finance on Trading (Internal Material Westerholm, 2024) Trading Simulator Practice: Behavioral Finance Theory Lecture (2 hr) LO1 LO2 LO3 LO4 LO5
Behavioral finance exercises, Consultation. Tutorial (1 hr) LO1 LO2 LO3
Week 08 Mid-term exam, (Tutorials will be held this week, where assignment queries will be addressed) Lecture (2 hr) LO1 LO2 LO3
Assignment consultation session Tutorial (1 hr) LO1 LO2 LO3 LO4
Week 09 Arbitrage, Real-time online trading simulator Lecture (2 hr) LO1 LO2 LO3
Arbitrage exercises Tutorial (1 hr) LO4 LO5
Week 10 Digital finance and AI, Real-time online trading simulator Lecture (2 hr) LO1 LO2 LO3 LO4 LO5
Digital finance and AI exercises Tutorial (1 hr) LO3 LO4 LO5
Week 11 Adanced Topics: Limit Order Book Markets (Chapter 6 Foucault et al., 2023) Lecture (2 hr) LO1 LO2 LO3
Limit Order Book Markets, Consultation Tutorial (1 hr) LO1 LO2 LO3
Week 12 Advanced Topics: Market Fragmentation (Chapter 7. Foucault, et al. ,2023) Lecture (2 hr) LO1 LO2 LO3
Market Fragmentation, Consultation. Tutorial (1 hr) LO1 LO2 LO3
Week 13 Review session and final exam preparation. Lecture (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

MARKET LIQUIDITY: Theory, Evidence, and Policy.

Thierry Foucault - Marco Pagano - Ailsa Röell

Oxford University Press ISBN 978-0-19-754206-4

 

 

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.