Using Financial Futures in Trading and Risk Management PDF Download

Author: Ignacio Mas
Publisher: World Bank Publications
ISBN:
Category : Financial futures
Languages : en
Pages : 58

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Author: Ignacio Mas
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Book Description
March 1995 Financial futures have become the cornerstone of financial management. The paper explains the contractual features of an array of financial futures, basic pricing relationships, and how futures can be used by investors and risk managers. Mas and Saá-Requejo explain the features of an array of futures contracts and their basic pricing relationships and describe a few applications to show how investors and risk managers can use these contracts. Futures -- and derivatives generally -- allow economic agents to fine-tune the structure of their assets and liabilities to suit their risk preferences and market expectations. Futures are not a financing or investment vehicle per se, but a tool for transferring price risks associated with fluctuations in asset values. Some may use them to spread risk, others to take on risk. Financial futures (along with options) are best viewed as building blocks. Futures have facilitated the modern trend of separating conventional financial products into their basic components. They allow not only the reduction or transformation of investment risk but also the understanding and measurement of risk. The market for derivatives has grown enormously over the past decade. The value of exchange-traded eurodollar derivatives (futures and options) is equal to roughly 13 times the value of the underlying market. The volume of trading in financial futures now dwarfs the volume in traditional agricultural contracts. As emerging markets develop, given their inherently risky nature, expect financial futures to play a prominent role in risk management. This paper -- a product of the Private Provision of Public Services Unit, Private Sector Development Department -- is part of a larger effort in the department to promote risk management techniques in emerging markets.

Author: Hedwig Heerdt
Publisher: GRIN Verlag
ISBN: 3656345163
Category : Business & Economics
Languages : en
Pages : 24

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Seminar paper from the year 2012 in the subject Economics - Finance, grade: 1,0, University of Westminster (Westminster Business School), course: International Risk Management , language: English, abstract: Since the 1970s futures contracts have proven a real success story, but in the course of the crisis, several futures-trading businesses went bankrupt. Because of a lack of trust, futures trading volumes started decreasing. But, even though the futures market has been adversely affected, futures contracts still serve as a fundamental risk management tool. This paper provides an insight into the use of futures contracts in risk management, trading on US exchanges. After a brief introduction to the topic of futures contracts, current literature will be reviewed. The literature review focuses primarily on current issues and developments on the futures market, while the third chapter explains step by step - based on an example of foreign exchange hedging - the use of futures contracts as well as how futures transactions are processes. Finally, the third chapter summarises relevant criteria a company has to reflect when considering to invest in futures contracts.

Author: CME Group
Publisher: John Wiley & Sons
ISBN: 047063488X
Category : Business & Economics
Languages : en
Pages : 1253

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Praise for The CME Group Risk Management Handbook "Wow! The CME Group Risk Management Handbook is a 'ten strike' and long overdue. A must-read and reference for the risk management industry!" —Jack Sandner, retired chairman of CME Group, member of the Executive Committee "This is a powerful book for its integration of futures and options markets with an understanding of the whole economy. It is an eye-opener to see how central these markets are to our economic lives." —Robert J. Shiller, Okun Professor of Economics, Yale University; Chief Economist, MacroMarkets LLC "Risk management is essential to successful investing, and The CME Group Risk Management Handbook provides the essentials for understanding risk management. In the wake of the financial turmoil of the last few years, managing risk should be part of any investment program. Among the key elements of risk management are stock index, bond, currency, and commodity futures as well as a growing number of futures, options, swaps, and other financial instruments built on indices tracking housing prices, weather conditions, and the economy. The CME Group Risk Management Handbook offers a comprehensive guide for using all of these to better manage financial risks." —David M. Blitzer, PhD, Managing Director and Chairman of the Index Committee, S&P Indices "Dare we ignore the advice of a financial institution, the largest of its kind in the world, that navigated the recent financial crisis without the aid of a single TARP dollar or access to the Fed's cheap loans? For CME Group, risk management has meant risk minimization as it enters its 151st year of life and its 85th year of central counterparty clearing without a single trading debt unpaid. It has been, and continues to be, a leader by example." —Philip McBride Johnson, former CFTC chairman "For the first time, a comprehensive handbook outlining the futures market in today's world is available. The CME Group Risk Management Handbook covers futures basics for the novice trader, while the veterans will benefit from an in-depth look at options and hedging. This handbook is a necessity for any professional, investor, or other market participant seeking to manage risk in the perpetually changing futures market." —H. Jack Bouroudjian, CEO, Index Futures Group

Author: George Kleinman
Publisher: Pearson Education
ISBN: 0132703637
Category : Business & Economics
Languages : en
Pages : 572

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Book Description
More fortunes are made and lost more quickly in the commodity futures markets than anywhere else. It is a game of consequence where profits won by one player are lost by another. The stakes are high, but for those who know how to play well, the rewards can be immense. Trading Commodities and Financial Futures shows you how to play the game to win. In this book, one of the world's most experienced traders introduces a new step-by-step methodology built on more than twenty-five years of success. George Kleinman begins with the basics—including a complete primer on how futures and options trading works, how traders' psychology impacts the markets, and how to avoid the pitfalls that trip up so many traders. This edition offers updated coverage of electronic trading, the latest contracts, and state-of-the-art trading techniques you won't find in any competing book. Previous editions of Kleinman's Commodity Futures and Options became international best sellers. This one offers even more insight for winning the commodities game—and winning big. Winning in a zero-sum game For every commodities winner, there's a loser: here's how to be the winner The trend is your friend How to use techniques designed to generate profits in a trending market The fundamentals: supply and demand in every key market Mastering the markets, from crude oil to soybeans, gold to coffee, foreign exchange to stock index futures TMVTT: The most valuable technical tool A unique trading methodology—how it works and how to use it When to get in, when to get out How to recognize the beginning—and end—of major market moves Twenty-five trading secrets of the pros A lifetime's experience, distilled into twenty-five crucial tips

Author:
Publisher: GRIN Verlag
ISBN: 3640889533
Category :
Languages : en
Pages : 57

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Author: Daniel Plaza
Publisher: GRIN Verlag
ISBN: 3640934148
Category : Business & Economics
Languages : en
Pages : 23

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Seminar paper from the year 2011 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 83%, University of Westminster (Msc Finance and Accounting), course: INTERNATIONAL RISK MANAGEMENT, language: English, abstract: The purpose of this report is to discuss the role of currency futures in risk management as well as their main advantages and drawbacks. The report will analyse the global rate of utilization of currency futures by comparison with other main currency derivatives and the geographic differences in their usage. Possible explanations for the preference for certain currency derivatives in risk management will be given. The usefulness of currency futures rate as an estimator of future spot rate will be discussed by reviewing and summarizing the existing literature on this subject. Practical applications of currency futures also will be covered in this report.

Author: Robert T. Daigler
Publisher: Irwin Professional Publishing
ISBN:
Category : Business & Economics
Languages : en
Pages : 424

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Book Description
Today's fast-changing markets are forcing financial institutions, investors and corporations to bear more risk than ever before. A miscalculation or a surprise move in interest rates or foreign currencies can wreak havoc on an institution's bottom line and competitive posture. Despite these perils, there is a shroud of mystery surrounding the very instruments designed to manage these risks - financial futures. Managing Risk with Financial Futures sheds much-needed light on financial futures. It describes how financial futures work and how they can be used to manage the risks associated with today's volatile financial markets. In a logical, step-by-step approach, noted financial futures authority Robert Daigler thoroughly explains every aspect of these fascinating instruments, from pricing to arbitrage to risk management. This book is the most comprehensive and authoritative overview of the financial futures markets ever written. Broad topics addressed include: the mechanics and regulation of the futures markets; pricing and arbitrage of financial futures; characteristics of interest rate, stock index and currency futures; and hedging and risk management strategies. After explaining the principles that underlie the financial futures markets, Dr. Daigler discusses specific risk management strategies. He shows how financial futures can be used to hedge fixed income and equity portfolios, asset/liability gaps, and corporate borrowing costs. In addition, he reveals special hedging applications for insurance companies. Managing Risk with Financial Futures goes much further than any other book in explaining how futures can be used safely to reduce risk and bolster returns. Such complex topicsas duration-based hedging, immunization and hedge ratios are addressed fully, from both a theoretical and practical point of view. Financial futures are a supremely important part of the financial world. Never before have they been written about with such depth and clarity.

Author: Michael Toma
Publisher: John Wiley & Sons
ISBN: 1118237102
Category : Business & Economics
Languages : en
Pages : 224

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Develop the skills to manage risk in the high-stakes world of financial speculation The Risk of Trading is a practical resource that takes an in-depth look at one of the most challenging factors of trading—risk management. The book puts a magnifying glass on the issue of risk, something that every trader needs to understand in order to be successful. Most traders look at risk in terms of a "stop-loss" that enables them to exit a losing trade quickly. In The Risk of Trading, Michael Toma explains that risk is ever-present in every aspect of trading and advocates that traders adopt a more comprehensive view of risk that encompasses the strategic trading plan, account size, drawdowns, maximum possible losses, psychological capital, and crisis management. Shows how to conduct a detailed statistical analysis of an individual's trading methodology through back-testing and real-time results so as to identify when the methodology may be breaking down in actual trading Reveals why traders should think of themselves as project managers who are strategically managing risk The book is based on the author's unique 'focus on the risk' approach to trading using data-driven risk statistical analytics Using this book as a guide, traders can operate more as business managers and learn how to avoid market-busting losses while achieving consistently good results.

Author: Daniel Plaza
Publisher: GRIN Verlag
ISBN: 3640934113
Category : Business & Economics
Languages : en
Pages : 29

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Book Description
Seminar paper from the year 2011 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 83%, University of Westminster (Msc Finance and Accounting), course: INTERNATIONAL RISK MANAGEMENT, language: English, abstract: The purpose of this report is to discuss the role of currency futures in risk management as well as their main advantages and drawbacks. The report will analyse the global rate of utilization of currency futures by comparison with other main currency derivatives and the geographic differences in their usage. Possible explanations for the preference for certain currency derivatives in risk management will be given. The usefulness of currency futures rate as an estimator of future spot rate will be discussed by reviewing and summarizing the existing literature on this subject. Practical applications of currency futures also will be covered in this report.