Futures and Options Collin Carter
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- Education
This course focuses on the institutional structure and economic functions of futures and options markets. Price formation in both commodity (e.g., corn, crude oil, cotton, and cattle) and financial (e.g., Eurodollar, Treasury Bonds, and stock indexes) futures and options markets will be examined in detail. The theory and practice of hedging will be explored in depth. Additional topics include: the theory of inter-temporal price formation for commodities and financials, common approaches used to forecast prices, statistical analysis of historical price behavior, and futures and options market regulation.
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- video
ARE139: Lecture 18, Fall 2015
Lecture 18 covers hedging using options and compares the benefits of
hedging using options versus hedging using futures. Examples of hedging
using options are presented. -
- video
ARE139: Lecture 17, Fall 2015
Lecture 17 introduces the concept of put-call parity and its
implications for options pricing. Arbitrage relationships between
options contracts are discussed. -
- video
ARE139: Lecture 16, Fall 2015
Lecture 16 Options on futures are introduced and options terms such as put, call,
strike price, premium, and intrinsic value and time value are defined.
Numerous examples of options trades are presented. -
- video
ARE139: Lecture 15, Fall 2015
Lecture 15: Carter continues the discussion of hedging, giving examples
of currency and financial hedges. The concept of an optimal hedge is
discussed. -
- video
ARE139: Lecture 14, Fall 2015
Lecture 14: Carter introduces hedging with futures as a risk management
strategy. He gives examples of long and short hedges in commodity
markets are presented. Basis is defined as the difference between
futures and cash prices and the implications of basis risk are
discussed. Hedging is categorized as arbitrage, operational, or
anticipatory. -
- video
ARE139: Lecture 13, Fall 2015
Lecture 13 introduces two basic techniques for futures price
forecasting: fundamental analysis and technical analysis. Carter gives
examples of fundamental analysis, such as purchasing-power parity in
currency markets are presented.