An edition of Derivative Markets: An Introduction
(2013)
Derivative Markets: An Introduction
by A. P. Faure
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Forwards, futures, swaps, options, hybrids (such as swaptions and options on futures) and a category “other” (credit derivatives, weather derivatives, etc) make up the derivative markets. The word is drawn from “derive” and means that the derivative instrument cannot exist on its own. It is closely related to “something” and this something is usually a spot (or “cash”) market instrument called the underlying instrument. A spot deal is a deal done now (T+0 days) for settlement now. “Now” means the earliest date dictated by market convention.
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Publish Date
2013
Publisher
Bookboon.com
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Subjects
Economics and Finance| Edition | Availability |
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Book Details
Table of Contents
Content
Context
Learning outcomes
Introduction
The financial system in brief
Ultimate lenders and borrowers
Financial intermediaries
Financial instruments
Spot financial markets
Interest rates
The derivative markets
Summary
Bibliography
Derivative markets: forwards
Learning outcomes
Introduction
Spot market: defintion
Forward market: defintion
An example
Forward markets
Forwards in the debt markets
Forwards in the share / equity market
Forwards in the foreign exchange market
Forwards in the commodities market
Forwards on derivatives
Organisational structure of forward markets
Summary
Bibliography
Derivative markets: futures
Learning outcomes
Introduction
Futures defined
An example
Futures trading price versus spot price
Types of futures contracts
Organisational structure of futures markets
Clearing house
Margining and marking to market
Open interest
Cash settlement versus physical settlement
Payoff with futures (risk profile)
Pricing of futures (fair value versus trading price)
Fair value pricing of specific futures
Basis
Participants in the futures market
Hedging with futures
Basis trading
Spread trading
Futures market contracts
Risk management by a futures exchange
Economic significance of futures markets
Summary
Bibliography
Derivative markets: swaps
Learning outcomes
Introduction
Interest rate swaps
Currency swaps
Equity / share swaps
Commodity swaps
Listed swaps
Organisational structure of swap market
Summary
Bibliography
Derivative markets: options
Learning outcomes
Introduction
The basics of options
Intrinsic value and time value
Option valuation/pricing
Organisational structure of option markets
Options on derivatives: futures
Options on derivatives: swaps
Options on debt market instruments
Options on equity / share market instruments
Options on foreign exchange
Options on commodities
Option strategies
Exotic options
Summary
Bibliography
Other derivatives
Learning outcomes
Introduction
Securitisation
Credit derivatives
Weather derivatives
Carbon credit derivatives
Freight (or shipping) derivatives
Energy derivatives
Summary
Bibliography
Endnotes
ID Numbers
Links outside Open Library
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History
- Created October 31, 2014
- 5 revisions
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| August 22, 2020 | Edited by ISBNbot2 | normalize ISBN |
| November 22, 2014 | Edited by Alice Kirk | Edited without comment. |
| October 31, 2014 | Edited by Alice Kirk | Edited without comment. |
| October 31, 2014 | Edited by Alice Kirk | Added new cover |
| October 31, 2014 | Created by Alice Kirk | Added new book. |