Derivatives and Risk Management - Slides (33-36)

Futures and Forward Contracts

1. Futures Markets
• Chicago Board of Trade
• Chicago Mercantile Exchange
• Electricity Futures and Options
2. Market Risk and Hedging with Futures
3. Hedgers and Speculators
4. Short in the Futures
5. Long in the Futures
6. The Perfect Hedge
7. Basis Risk and Basis movement
8. Applications to financial instruments

Hedging with Bonds and Maturity Matching

1. Duration measures and hedging
2. Immunization

Options -  Options.xls Spreadsheet

1. Option Types and Markets
• Terminology - Slides (4-7)
2. Factors that affect the value of an option - Slides (17-18)
3. Introduction of Option Pricing
4. Black-Scholes (BSOP) Option Pricing Model