Forwards and Futures - Introduction
About the Lecture
The lecture Forwards and Futures - Introduction by Edu Pristine is from the course ARCHIV Financial Instruments. It contains the following chapters:
- Introduction
- Index Point and Value of index point
- Choice of contracts
Author of lecture Forwards and Futures - Introduction
Edu Pristine
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Excerpts from the accompanying material
... have been defined by the exchange themselves. Chicago Board of Trade and Chicago Mercantile Exchange are two examples. Open outcry system and Electronic trading. Over the ...
... that want to remove the volatility of the underlying, hence delivery/cash settlement usually takes place FUTURES. Traded on exchanges. Standard contracts. Clearing house and daily mark to market reduces ...
... hedging, speculation and index arbitrage. Stock index futures can be used to eliminate the market risk of a portfolio of stocks. For example, a investment bank manager might fear a fall in equity prices over the next three months, which is the end of his evaluation period. He can use stock index futures to ...
... buys the stocks underlying the index and sells futures. When F0< S0e(r–q)Tan arbitrageur buys futures and shorts or sells the stocks underlying the index. Program Trading: Arbitrage opportunities are calculated with real-time data using a computer, it is also known as program ...
... the life of the hedge because the futures prices are quite volatile during the delivery month. When there is no futures contract on the asset being hedged, choose the contract whose futures price is most highly correlated with the ...
