60
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What's funny about "He leveraged his @#% deep into soy beans and cocoa futures" in The Jerk (1979)?
The joke contrasts a low risk investment strategy with an extremely high risk strategy. The modern equivalent would be "He leveraged his ass deep into Bitcoin and GameStop futures."
The low ...
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treasury bond future confusion
The way bond futures work, there will be several different Treasury bonds that are eligible for delivery on the futures expiry date. You won't know the exact coupon, but they will all have maturities ...
- 140k
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Why do futures allow higher leverage?
Return is generally measured based on the amount initially invested. If you buy a barrel of oil for $80 and sell it for $100, you earn a 25% return ($20 profit / $80 invested).
With a futures contract,...
- 140k
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why would a forward ever have a premium?
Because banks are in the business of making money. They provide a service (taking the other side of the forward the hedge fund wants) in return for making a little bit of money on the deal.
Imagine ...
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When do proceeds from futures settle?
To trade futures contracts you must have a cash and a securities account at your clearing broker / or the exchange directly. For simplicity in the explanation below I'll just refer to your account at ...
- 700
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Accepted
why would a forward ever have a premium?
That formula is the fair value of a future, which implies no credit risk. A forward is an over-the-counter product where counterparty risk is something to consider - e.g. what happens if the hedge ...
- 140k
1
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Accepted
References/terms to search for regarding financial instrument universe selection
It's a very open ended question, but you could try to answer this from a risk perspective. For example:
You believe that Us companies will do well in the next 5 years, so you want risk exposure to ...
- 700
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Trying to teach myself futures ,have some queries
When you enter in to a futures contract (typically called "buying" or "selling" even though you aren't really buying or selling anything yet - you're just entering into one side of ...
- 140k
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What is the gambling difference between sports betting and trading stock market derivatives based on indices?
There is a big difference. It all comes down to the fact that for financial derivatives, there's an underlying asset that can be bought and sold, allowing for hedging and arbitrage, which is not ...
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