DERIVATIVE MARKETS FUTURES‚ FORWARDS‚ OPTIONS‚ SWAPS‚ CAPS AND FLOOR MARKETS Prepared by: Zagorskaya Ksenia 1. OVERVIEW OF DERIVATIVE MARKET Derivatives are financial instruments whose value is derived from the value of something else. They generally take the form of contracts under which the parties agree to payments between them based upon the value of an underlying asset or other data at a particular point in time. The main types of derivatives are futures‚ forwards‚ options and swaps
Premium Futures contract Derivative Derivatives
Australian School of Business School of Banking and Finance FINS 3635 OPTIONS‚ FUTURES AND RISK MANAGEMENT TECHNIQUES Course Outline Semester 1‚ 2012 Part A: Course-Specific Information Part B: Key Policies‚ Student Responsibilities andSupport Table of Contents PART A: COURSE-SPECIFIC INFORMATION 1 2 2.1 2.2 2.3 2.4 2.5 3 STAFF CONTACT DETAILS COURSE DETAILS Teaching Times and Locations Units of Credit Summary of Course Course Aims and Relationship to Other Courses Student Learning Outcomes
Premium Futures contract Derivative Final examination
A futures contract is a commitment to make or take delivery of a specific quantity of a commodity or other financial obligation at a predetermined place and time in the future. All terms of the contract are standardized and established beforehand‚ except for the price‚ which is determined by open outcry in a pit or ring on the exchange trading floor of a commodity exchange. All contracts ultimately are settled either through liquidation (by offsetting purchases or sales) or by the delivery of the
Premium Futures contract Derivative Commodity market
requirements for the Degree of Masters in Finance & Control Department Of Business & Financial Studies University Of Kashmir Certificate This is to certify that the project entitled “Factors Affecting the Success and Failure of Futures Contracts” is research work done by Owais Javaid Qureshi‚ under my supervision‚ during March-April‚ 2012‚ submitted to the Department Of Business and Financial Studies‚ University Of Kashmir in partial fulfillment for the award of the Degree of Masters
Premium Futures contract
(a) Hedge? (b) Speculate? (c) Arbitrage? (d) None of the above Answer: (a)‚ (b)‚ (c) 3. During the growing season a corn farmer sells short corn futures contracts in an amount equal to her crop. If after harvesting and selling her crop she maintains the contracts‚ she is then considered a: (a) Hedger (b) Speculator (c) Arbitrager (d) None of the above Answer: (b) 4. A firm provides a service that benefits
Premium Futures contract Short Hedge
S&P/ASX 200 futures contract is 10% and the stock index is currently 4400. Each contract has a multiplier of $25. How much margin must be put up for each contract sold? If the futures price falls by 1% to 4356‚ what will happen to the margin account of an investor who holds one contract? What will the investor’s percentage return based on the amount put up as margin be? The value of margin must be put up for each contract sold: 4400 x 25 x 10% =$11000 When the futures price fall 1%
Premium Futures contract Forward contract
you enter into a short futures contract to sell July silver for $17.20 per ounce. The size of the contract is 5‚000 ounces. The initial margin is $4‚000‚ and the maintenance margin is $3‚000. What change in the futures price will lead to a margin call? What happens if you do not meet the margin call? Problem 5.2. What is the difference between the forward price and the value of a forward contract? Problem 5.3. Suppose that you enter into a six-month forward contract on a non-dividend-paying
Premium Futures contract Short
Distinguish between futures and forward contract Futures contract A futures contract is a contractual agreement‚ generally made on the trading floor of a futures exchange‚ to buy or sell a particular commodity or financial instrument at a pre-determined price in the future. Futures contracts feature the quality and quantity of the underlying asset‚ they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset‚ while others
Premium Futures contract Forward contract
Walking Through Some Examples of Futures and Options Contracts – Speculation and Hedging As Dr. Cogley said in class the other day‚ sometimes futures contracts and options are hard to wrap your head around until you see them a few times. So I’ve written up some examples similar to those Dr. Cogley did in lecture‚ with a little more explanation about how we get the results that we do. But before we jump into that‚ we need to revisit our terms. 1. Forward contract: A buyer and a seller agree to a specific
Premium Option Derivative Call option
In the futures markets‚ there is no assurance that a liquid market may exist for offsetting a commodity contract at all times. Some future contracts and specific delivery months tend to have increasingly more trading activity and have higher liquidity than others. The most useful indicators of liquidity for these contracts are the trading volume and open interest. There is also dark liquidity‚ referring to transactions that occur off-exchange and are therefore not visible to investors until after
Premium Futures contract