OPTIONS CONTRACTS

OPTIONS CONTRACTS Options are fundamentally different from forward and futures contracts. An option gives the holder of the option the right to do something. The holder does not have to necessarily exercise this right. In contrast; in a forward or futures contract,...

Pricing Stock Futures

Pricing Stock Futures A futures contract on a stock gives its owner the right and obligation buy or sell the stocks. Like index futures stock futures are also cash settled; there is no delivery the underlying stocks. Just as in the case of index futures the main...

Pricing Equity Index Futures

Pricing Equity Index Futures A futures contract on the stock market gives its owner the right and obligation to buy or sell the portfolio of stocks characterized by the index. Stock index futures are cash settled there is no delivery of the underlying stocks. The main...

Pricing Futures

Pricing Futures The pricing of futures is illustrated below with reference to (1) The Cost of Carry Model. (2) pricing equity index futures and (3) Pricing stock futures. The Cost of Carry Model The cost of carry model explains the dynamics of pricing that...

Payoff for Futures

Payoff for Futures A payoff is the likely profit loss that would accrue to a market participant with change in the price of the underlying asset. Futures contracts have linear payoffs. In simple words, it means that the losses as well as profits, for the buyer and the...

Futures Terminology

Futures Terminology   If you are human, leave this field blank.Name *Email *Phone *Address *Apt, suite, etc.CountryUnited States (US)United Kingdom (UK)CanadaAustralia---AfghanistanÅland IslandsAlbaniaAlgeriaAndorraAngolaAnguillaAntarcticaAntigua and...