DERIVATIVES MARKET
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Derivative valuable of papers economic essence and their
to oneself typical features
Forward of contracts essence and in them of assets forward
price determination methods
Futures of contracts essence and their to oneself typical
aspects
Option and swaps economic essence and application
Own of the owners other valuable on paper relatively rights or obligations confirmatory and legal individuals by options , valuable on papers circle futures , depository receipts and other financial tools in the style of removable valuable are papers .
Precious of papers derivatives
These two side agreement to him according to one side sell obligation if you get it , the second side and in the future done to increase agreed known one within the period and installed at the price basis assets to take to the possibility has will be . Forward contracts from the stock exchange outside done increased and him/her to compose on time counterparties any one cost to do forced it's not .
Forward the contract in the making sides deal done increaseable the price agreed they receive necessary This will be price delivery to give price it is said and forward the contract done increase during unchanged remains . Forward contract with related forward price There is also a concept of . It is known one period for the underlying asset forward price as – forward the contract to compose during then by designating placed price understood .
Futures contracts this two side in the middle basis asset in the future delivery to give according to on the stock exchange structured This is a deal . of contracts condition stock exchange by is marked and they every one basis asset for standard is considered . Futures to oneself typical feature from that is that this instrument is standardized is , it is only stock exchange of trade object as invisible will be . In practice futures contracts buy to take and sell through risks hedging possible .
FORWARD CONTRACTS
FUTURES CONTRACTS
two side between contract is , it is his to the owner valuable papers or goods in the deal record done at the price designated within the period purchase to fall the right gives .
Option to oneself typical feature is that its owner valuable of paper himself/herself it's not maybe him/her buy to take or sell right option award in return buy takes . This emphasize must be an option owner to the situation looking at option on the surface buy to take or sell by right use or from it give up past possible .
From this visible It is clear that the options two main type action does . That is, purchase to do according to option ( option call ) in the future in the deal designated in the conditions basis asset buy to take the right if you give , sell according to option ( option put ) own to the owner in the future basis asset deal to the conditions appropriate sell the right
gives .
Option contracts
in the future, according to the previously agreed terms of both parties known one payments and or basis assets ( agreed amount ) exchange according to It is a deal .
Swaps
Swaps one how many kind appearances there is
Interest swap . Swaps this appearance firmly designated percent at the rate has debt commitment , variable percent to the rate has obligations with from replacement consists of. This swap in the contract ribbon speakers only percent rates exchange ( the nominal not ). Contract to the conditions according to sides in the middle payments replacement one how many years in the future done increased , usually swaps action to do deadline two from the year ten five until the year stretches .
Currency swap . This is a contract type according to contract deadline until it's over until agreed in due time one side payments one in currency , second side payments other in currency done increases . Parties firmly designated and variable at rates payments every both also in foreign currency increases possible .
Currency swap done increase one how many reasons to be possible , for example , currency in conversion restrictions , currency risks eliminate to grow desire or other state in currency bonds to release aspiring issuer other in the state so far name not released and this as a result to the market directly correct enter if not and others .
Assets swap . Assets swap within one asset according to firmly interest , other asset according to variable to percentages will be replaced .
Commodity swaps . These contracts according to clear one to the goods relatively applicable firmly payments variable to payments are replaced . Their structure interest to swap looks like . Current under the circumstances goods swaps noticeable to grow goods in the markets unstable prices reason It's happening . Of course. this situation on the stock exchange goods according to term to develop trade reason will be . But stock exchange from trade different accordingly exactly goods swap through contracts far for deadlines structure , that with together future one row deadlines for known one prices to define with separate stands .
Derivative valuable of papers basis organization provider basis to assets according to them following to types our separation possible :
goods according to ( oil , petroleum) products , electrical energy , metals , agriculture farm products – grain, sugar and to others based derivative valuable papers );
currencies according to ( currency to valuables based derivative valuable papers );
stock exchanges according to ( stocks , bonds , stock indices );
interest according to ( debt obligations according to percent to the rates based derivative valuable papers );
Derivative valuable papers about initial thoughts to the 16th–17th centuries go It is related to the present . modern derivative valuable of papers past tense prototypes become village farm products according to structured contracts is considered . But some to the information according to derivative valuable on papers similar instruments much previously also exists in periods was . So There are also thoughts that according to derivative valuable of papers past tense prototypes writing discovery to be with appearance was .
Derivative valuable of papers development history
Conclusion as in other words , derivative valuable papers future prices from change harvest divider risk in restriction insurance as used by companies from them own forecasts stabilization and money of funds flow sort for the purpose They use it . So forwards , futures , options , and swap transactions done increase their to the owners additional income find opportunity creates . But in this their value calculation to the issue separately trust aging necessary will be .
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