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Similarities Between Options and Futures

An option is a derivative contract granting its owner (holder) the right, but not the obligation to buy (for a call option) or…

ED Futures Quotation

The price of a Eurodollar futures contract (ED) is quoted as 100.00 minus the interest rate for the contract period....

Stock Index Futures Pricing: One Period Model

The fair value of a stock index futures contract can be identified using arbitrage. At the beginning of the period...

Options versus Futures

An option is a derivative contract giving the holder (buyer) the right, without the obligation, to trade (buy or sell)...

Futures Contract Valuation

A futures contract is marked to market on a daily basis. The value of a futures contract at the trade...

Difference Between Futures Contract and Forward Contract

A forward (or advance contract/ forward contract) is an over-the-counter (OTC) contract that obliges its holder to buy or sell...

Futures Margin

Investors using futures contracts must post margin (in the form of cash or marketable securities) in an account maintained by...

Changing The Beta of a Portfolio Using Futures

Futures contracts are sometimes used to alter the beta of a portfolio which has been reduced to zero (in order...

Difference Between Options and Futures Contracts

An option is a derivative contract giving the holder (buyer) the right, without the obligation, to trade (buy or sell)...

Duration-Based Hedge Ratio

A hedge ratio that is constructed when interest rate futures contracts are used to hedge positions in an interest-dependent asset...