Dispense VERIFICATO
CF 2
20 visualizzazioni
37 download
★ 1,5 (1)
Di cosa parla
- Introduction to Financial Markets: Explores financial instruments, classifying them as equity-based, debt-based, or foreign exchange. Examples include various types of bonds (monetary and capital market instruments) and shares.
- Risk and Return for Financial Instruments: Defines return and log-return, identifying factors influencing risk such as maturity, issuer credit, and liquidity. It highlights the inherent trade-off between risk and return, using empirical data to illustrate this relationship across different asset classes.
- Derivative Markets: Discusses the evolution of derivative markets from forwards to more complex instruments, distinguishing between Over-The-Counter (OTC) and exchange-traded contracts. It defines derivatives as financial instruments whose value depends on an underlying asset, emphasizing their role in risk management.
- Market Principles and Risks: Outlines key market principles like liquidity, transparency, and practicability. It also details the various risks managed by derivative markets, including market price risk, counterpart risk, basis risk, and liquidity risk, explaining how these are addressed.
- Reasons for Trading Derivatives: Covers the primary motivations for engaging in derivative trading: hedging (to mitigate risk), arbitration (to profit from price discrepancies), and speculation (to capitalize on anticipated price movements). The role of market makers in ensuring market efficiency is also noted.
- Forward Contracts: Provides a comprehensive definition of forward contracts, their purpose, and characteristics (OTC, physical or cash settlement, zero initial value). It then delves into the no-arbitrage pricing of forwards for various underlying assets, including those without dividends, with discrete or continuous flows of payments, foreign currencies, and commodities (incorporating storage costs and convenience yield).
- Market Value of Forwards: Explains how the market value of a forward contract changes over its life cycle, particularly when transferred before maturity, and derives the formula for its valuation.
- Futures Contracts: Details the key differences between futures and forward contracts, focusing on the standardization and exchange-traded nature of futures. It outlines the specific elements of standardization, such as contract size and maturity.
- Futures Exchanges and Clearing Houses: Explains the function of clearing houses in guaranteeing financial obligations, acting as intermediaries, and eliminating counterpart risk. It also describes the trading process on futures exchanges.
- Orders and Traders in Futures Markets: Describes various order types used in futures markets (e.g., market, limit, stop, spread orders) and the specific terminology for opening and closing positions. It categorizes market participants into hedgers (risk reduction), speculators (profit-seeking), and investors (diversification), detailing their strategies.
- Types of Futures Contracts: Enumerates the diverse range of futures contracts available, including commodity, equity index, foreign exchange, interest rate, metal, real estate, and even weather futures.
- The Margin Mechanism: Thoroughly explains the margin system in futures trading, covering initial margin (deposit), marking to market (daily settlement), maintenance margin (minimum account level), and variation margin (additional funds required during a margin call). It highlights how this mechanism manages risk and provides leverage.