Transcript Derivatives

Lecture 1
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Welcome
Syllabus
Homework policy
Email
Taking notes
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Derivatives are financial instruments whose
price and value derive from the value of the
underlying assets or other variables (ISDA)
Derivatives are a “zero sum game”
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1840s Midwest USA farmers
1848 Chicago Board of Trade (CBOT) for grain
1874 Chicago Produce Exchange for
butter/eggs
1919 Chicago Mercantile Exchange (CME)
Risk management
Land options
Risk management
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OTC vs. Exchanges
Eurex (E-X)
Chicago Board Options Exchange (CBOE)
Chicago Mercantile Exchange (CME)
Chicago Board of Trade (CBOT)
New York Mercantile Exchange (NYMEX)
Hong Kong Futures Exchange (HKFE)
Source: Bank for International Settlements
Source: WFE/IOMA Derivatives Market Survey 2012
Source: WFE/IOMA Derivatives Market Survey 2012
Source: WFE/IOMA Derivatives Market Survey 2012
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Futures
Options / Warrant
Future options
Swaps
Mortgage backed securities
Forward Rate Agreement
Convertible bonds
Real options
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Stocks (example)
Bonds
Indices
Commodities (examples for metal and ag.)
Currencies
Weather
Carbon emissions
Radio bandwidth
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Arbitrage
Speculation
Hedging