Fundamentals Of Futures And Options Markets 7th Edition Pdf 41 |TOP|

1. Introduction 2. Mechanics of futures markets 3. Hedging strategies using futures 4. Interest rates 5. Determination of forward and futures prices 6. Interest rate futures 7. Swaps 8. Securitization and the credit crisis of 2007 9. Mechanics of options markets 10. Properties of stock options 11. Trading strategies involving options 12. Introduction to binomial trees 13. Valuing stock options: The Black--Scholes--Merton model 14. Employee stock options 15. Options on stock indices and currencies 16. Futures options 17. The Greek letters 18. Binomial trees in practice 19. Volatility smiles 20. Value at risk 21. Interest rate options 22. Exotic options and other nonstandard products 23. Credit derivatives 24. Weather, energy, and insurance derivatives 25. Derivatives mishaps and what we can learn from them Answers to Quiz Questions Glossary of terms DerivaGem software Major exchanges trading futures and options Tables for N(x) Index

Trading in energy futures and options plays a key role in hedging against fluctuations in the price of energy commodities, especially crude oil and natural gas. This long-awaited new edition highlights how exchange-traded futures and options markets work and how companies can successfully use the markets in their overall strategy to increase profitability. This wide-ranging new edition offers valuable insight for young professionals and students. Discussions on market efficiency, the role of commodities in Modern Portfolio Theory, and the NYMEX introduction of Clearport are all covered in this introduction to futures markets.

Fundamentals Of Futures And Options Markets 7th Edition Pdf 41

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The presence of market drivers, or lack thereof, can lead to a plethora of different scenarios. Too many can lead to chaotic, whipsaw trading conditions; too few can lead to stale, compressed markets. Understanding when to trade and when to stay on the sidelines is an integral part of achieving longevity in the futures/options markets.

This module will cover the basic properties, pricing and hedging of futures/forwards, options, swaps and other derivatives traded on financial markets, together with the working mechanism of the derivative markets. The module provides analytical and numerical methods to price derivatives contracts. The module covers the use of derivatives in hedging and managing financial risk but also their limitations in connection with stock market crashes and 2007 financial crises.

The aim of the module is to provide an in-depth study of the use of futures and options with particular reference to the risk management and hedging. Both from a theoretical and empirical perspective the module will also cover in detail why futures and options are used, the mechanics of using futures and options, the economic benefits of using futures and options as risk management instruments and the pricing of futures and option contracts. The material covered here will be relevant to understand and critically evaluate the use of futures and options in different markets.

The Commodity Futures Trading Commission (CFTC) rulemaking to establish position limits for futures, options, and swaps must be finalized immediately. Although we were encouraged when the CFTC approved the reproposed rule in November 2013, over two years have passed, and the final rules are long overdue.

As the price of oil fluctuated without regard to supply and demand, experts also testified before Congress that the prices of oil futures were linked to traditional financial instruments, such as the U.S. dollar and other currencies, interest rates, and macroeconomic fundamentals. These connections across markets persist today even as the price of oil sits at relatively low levels. In January 2016, oil and stock markets prices exhibited the highest level of correlation than any time since 1990. Current low oil prices and news of oversupply do not mean that the market for oil no longer moves in both directions and that the potential for significant volatility has been eliminated.

This unit provides students with the analytical skills and techniques required to effectively construct diversified portfolios of securities. The unit prepares students for asset allocation management and performance assessment of diversified portfolios. Issues relating to the management of portfolios containing options, futures and other derivatives will also be examined.

Although market participants cannot trade VIX spot itself, they can use derivatives that track VIX, including futures and options. These derivatives may have different characteristics than the spot index, but they still maintain the potential hedging property of the spot index. Exhibit 2 shows the correlations among the S&P 500, VIX spot, and two VIX futures benchmark indices in the U.S.

Responsible for the course

Costas Xiouros

Department

Department of Financial Economics

Term

According to study plan

ECTS Credits

7,5

Language of instruction

English

Introduction

The objective of this course is to provide students with an understanding of corporate and financial risk management: how to measure their financial risks, why corporations should manage them and what tools they may use to do so, which are mainly the derivative securities. The recent financial crisis, however, has also brought into light the dangers that arise from the improper use of derivative instruments. Derivatives allow a firm to fundamentally alter its risk profile but at the same time they facilitate speculation while a third type of participants are the parties who neither speculate nor manage their risk but try to make small profits from mispricing between derivatives and their underlying assets. As a result a basic understanding and intuition of derivatives markets, its instruments and participants is essential not only to students and specialists in finance, but also to general business practitioners.

During this course you will learn the principles behind risk management and how derivative instruments can be used to change the risk profile of a corporation or simply a financial position. You will also learn the basics about the derivatives markets, namely the regulated exchanges and the over-the-counter markets, and their main characteristics that are important from the point of view of the use and pricing of derivative instruments. The course then delves deeper into the basic derivative instruments, options, forwards, futures (both financial and commodity) and swaps, and deals with their structure, use, pricing and hedging. The central ideas around which the whole course is constructed are those of hedging, replication and arbitrage. These ideas will be developed both through economic reasoning and practical examples as well as technical applications. A certain level of mathematically based theory is required to fully understand, appreciate and be able to apply such a technical subject. be457b7860