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Derivatives




Futures Equivalent


A limit on speculative positions in options on futures contracts. The futures-equivalent of an option position is the number of option contracts multiplied by the previous day’s delta for the option series. For instance, twenty deep out-of-the-money calls with a delta of 0.4 would be viewed as eight futures-equivalent contracts.

 



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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