Karteikarten
Futures
Karten in diesem Stapel (19)
- 1what are futuresA contract to buy or sell the underlying asset in the future at a predetermined price today
- 2Future Contracts: BasicsFutures are standardised forward contract either for delivery or cash settlement.
Standardised on:
Quantity
Quality
Delivery date
Delivery point
Counter party - 3Futures : how does it work?seller expects price to fall
buyer expects price to rise
seller & buyer negotiate and broker the future price
buyer & seller pay margin to brokers
enter contract with clearing corporation
members can hold position or liquidate before expiration - 4what is margin in futures?Margin : Good faith deposit in the form of cash or a bank letter of credit or short term U.S. Treasury instruments
- 5what are the different margin terms?Initial margin
Daily settlement or marking-to-market
Maintenance margin
Margin call
Variation margin - 6Initial marginmaximum permitted daily fluctuation
- 7variation margin75% of IM
- 8Maintenance margin (required)Initial margin - variation margin
- 9margin credit (credit in the margin account)Initial margin + loss/gain in the commodity price*no of units ;
- 10if margin account credit < maintenance marginbroker of A makes the margin call and A needs to pay the variation margin
- 11if margin credit > maintenance marginwithdraw cash that is in excess of initial margin (required)
- 12what are closing futures positions?cash settlement
exchange for physical
Offset or reversing trade - 13variation marginInitial margin - credit in margin account
- 14Futures Pricing Cost of carryFuture price = spot price + cost of carry - expected future gain
- 15when a company is expected to make purchase in futuretake a long position in the futures
- 16when a company is expected to sell an asset in the futuretake a short position in futures contract to hedge its position
- 17what is hedge ratioHedge ratio refers to the ratio of number of units of futures required for hedging one unit of underlying assets risk exposure
- 18exampleSpot price change(INFY) = a+b INFY Future Price chage
Where ‘b’ is hedge ratio - 19cross hedgingMD of Asset to be hedged Price of Asset to be Hedged
-------------------------------- * ---------------------------------- * Beta
MD of Asset used for hedge Price of Asset used for hedge
Informationen
- Beschreibung
- Karteikarten am Futures, erstellt von Mukundhan Srinivasan am 27/08/2016.
- Erstellt von
- Mukundhan Srinivasan
- Aufrufe
- 2
- Bewertung