1 / 14

FRE 501 2013 Lab 1

FRE 501 2013 Lab 1. Intro to Futures Markets. Agenda. Terminology Why Futures Global Exchanges. Some Terminology (‘Lingo’). Futures are securities and also derivatives Securities : in essence assets that are fungible (inter-changeable) tradeable (pencil example if necessary)

cody
Download Presentation

FRE 501 2013 Lab 1

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. FRE 501 2013Lab 1 Intro to Futures Markets

  2. Agenda • Terminology • Why Futures • Global Exchanges

  3. Some Terminology (‘Lingo’) Futures are securities and also derivatives Securities: in essence assets that are • fungible (inter-changeable) • tradeable (pencil example if necessary) Derivatives: instruments that derive their value from the price of some other underlying entity • Futures differ from stocks/bonds • Stocks/Bonds transfer capital • Futures  transfer price risk

  4. Why Learn about Futures at All Marketsare fundamental to economics; efficient prices are key to maximizing social welfare Price Discovery: Futures Markets where they exist, determine the ‘correct’ prices for commodities (for better or worse) – all participants base their decisions on the clearing prices

  5. Wrong Prices Wrong prices lead to suboptimal human behaviour – deforestation, overfishing, overcultivation, overconsumption, over-construction (houses in US,Iceland, Spain, etc, New South China Mall in China) We excel at killing the only planet we have Nearest possible alternative exoplanet is 12 light-years away, about 142,000 years with current technology

  6. Important for Everyone Stay-home speculators (social parasites)

  7. Battling immoral opportunistswhether banks/corporates/individuals 知 己 知 彼 百 战 百 胜 Know yourself, Know your opponentA hundred battles, a hundred victories – Sun Tzu Weapons by themselves are neutral Use the enemy’s weapons against themBattle of Red Cliff – straw boats/arrows

  8. Distortions in the Futures Markets Read the testimonials of Michael Masters , an honest Hedge Fund Manager who fought for better markets: • 2008: To the Committee on Homeland Security and Governmental Affairs, US Senate • 2009: To the CFTC

  9. Exchanges: Americas

  10. Exchanges: Europe

  11. Exchanges: Asia

  12. Global Derivatives (by # contracts)

  13. Derivatives Exchanges and Products • Directory Listing at Mondo Visione’sWebsite • Also, check out the World Federation of Exchanges website. Their IOMA 2012 survey gives global statistics on derivatives trading worldwide

More Related