Futures and options markets an introduction pdf
FRM Part I - Introduction: Futures and Options Markets
In finance , a futures contract more colloquially, futures is a standardized forward contract , a legal agreement to buy or sell something at a predetermined price at a specified time in the future, between parties not known to each other. The asset transacted is usually a commodity or financial instrument.
If not, the broker has the right to close sufficient positions to meet the amount called by way of margin. Performance bond margin The amount of money deposited by both a buyer and seller of a futures contract or an options seller to ensure performance of the term of the contract. Write a review. As I now hope to pursue a career in risk management and markets or something related to that I know that the knowledge I gained with the help of this book will help to carry me throughout my career.
Contracts are negotiated at futures exchangeswhich act as a marketplace between buyers and sellers. Popular Courses. Why not share. The best selling books are not always the best.
Download free textbooks as PDF or read online. However, futures contracts also offer opportunities for speculation in that a trader who predicts that the price of an asset will move in a particular direction can contract to buy or sell it pdg the future at a price which if the prediction is correct will yield a profit. Like this presentation. SlideShare Explore Search You?
Frequently bought together
The difference in futures prices is then a profit or loss. CME Group. Visibility Others can see my Clipboard. Download free textbooks as PDF or read online.
In this scenario there is only one force setting the price, as expressed by supply and demand for the futures contract. Compare Investment Accounts. Main article: Margin finance. Frequently bought together.
Enter your mobile number or email address below and we'll send you a link to download the free Kindle App. Then you can start reading Kindle books on your smartphone, tablet, or computer - no Kindle device required. To get the free app, enter your mobile phone number. Would you like to tell us about a lower price? If you are a seller for this product, would you like to suggest updates through seller support?
The salient features of forward contracts are: They are bilateral contracts and hence exposed to counter-party risk. Here, the forward price represents the expected future value of the underlying discounted at the risk free rate -as any deviation from the theoretical price will afford investors a riskless profit opportunity and should be arbitraged away. Are you sure you want to Yes No. This process is known as marking to market. Introduftion their very nature, the financial markets are marked by a very high degree of volatility.
Please select the platform you want to share this book on. He also successfully completed the Stockbroker Examination Requirements at Cancel at any time. Derivatives are used for hedging, speculation and investment. Home Derivative Markets: An Introduction.