Class 1

Class 1 - 4 types of traders Arbitrager only trader acting...

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Options-Class One Get Notes 9-09-09 Futures/Forwards… Swaps 1/3 Options 2/3 Much harder. Formula’s stat calc etc. Forwards Futures- Just forward on an exchange What’s an example of a forward: CDS-typical 5 year contract for 10M $. X / yr insurance. VIX, Weather: Can’t buy spot and hold it. Need Futures to bet, hedge these variables. All futures contracts are alike Forward is bilateral contract Mark to Market Ftc Cftc- regulates commodities market Credit Risk, Clearing
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Unformatted text preview: 4 types of traders Arbitrager only trader acting on relative pricing Politicians trying to reduce effect of speculators. Are they good or bad for markets and the economy. Provide liquidity and reduce risk premium Heterogamous markets Insurance, capital needed Market totally based on speculation will not last in the long run. Arbitrageurs- World for them has dramtically changed Mostly gone from electronic trading. Gone by algorithms...
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This document was uploaded on 10/27/2009.

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Class 1 - 4 types of traders Arbitrager only trader acting...

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