1.6 Derivatives markets Exchange(交易所) traded Traditionally exchanges have used the open. outcry system, but increasingly they are switching to electronic trading Contracts are standard and there is virtually no credit risk Over-the-counter(OTC,场外市场) A computer-and telephone-linked network of dealers at financial institutions, corporations and fund managers Contracts can be non-standard and there is some small amount of credit risk Options, Futures, and Other Derivatives, 4th edition g 2000 by John C Hull Tang Yincai, C 2005
Options, Futures, and Other Derivatives, 4th edition © 2000 by John C. Hull Tang Yincai, © 2005 1.6 Derivatives Markets • Exchange (交易所)traded – Traditionally exchanges have used the openoutcry system, but increasingly they are switching to electronic trading – Contracts are standard and there is virtually no credit risk • Over-the-counter (OTC，场外市场) – A computer- and telephone-linked network of dealers at financial institutions, corporations, and fund managers – Contracts can be non-standard and there is some small amount of credit risk
Ways Derivatives are used To hedge(规避) risks To speculate(投机)( take a view on the future direction of the market) To lock in(锁定) an arbitrage(套利) profit To change the nature of a liability(负债) a To change the nature of an investment without incurring the costs of selling one portfo|o(投资组合) and buying another Options, Futures, and Other Derivatives, 4th edition g 2000 by John C Hull Tang Yincai, C 2005
Options, Futures, and Other Derivatives, 4th edition © 2000 by John C. Hull Tang Yincai, © 2005 1.7 Ways Derivatives are Used To hedge(规避) risks To speculate(投机) (take a view on the future direction of the market) To lock in(锁定) an arbitrage(套利) profit To change the nature of a liability(负债) To change the nature of an investment without incurring the costs of selling one portfolio(投资组合) and buying another
18 Forward contracts(远期合约) ° A forward contract is an agreement(协 ix to buy or sell an asset at a certain time in the future for a certain price the delivery price,交割价格) It can be contrasted with a spot contract(现货合约 Which is an agreement to buy or sell immediately It is traded in the otc market Options, Futures, and Other Derivatives, 4th edition g 2000 by John C Hull Tang Yincai, C 2005
Options, Futures, and Other Derivatives, 4th edition © 2000 by John C. Hull Tang Yincai, © 2005 1.8 Forward Contracts(远期合约) • A forward contract is an agreement(协 议) to buy or sell an asset at a certain time in the future for a certain price (the delivery price，交割价格) • It can be contrasted with a spot contract (现货合约)which is an agreement to buy or sell immediately • It is traded in the OTC market
19 Foreign Exchange Quotes for GBPon Aug 16, 2001(See page 3) Bd(出价)Ofer(报价) Spot 1.4452 1.4456 1-month forward 1.4435 1.4440 3-month forward 1.4402 1.4407 6-month forward 1.4353 1.4359 2-month forward.4262 1.4268 Options, Futures, and Other Derivatives, 4th edition g 2000 by John C Hull Tang Yincai, C 2005
Options, Futures, and Other Derivatives, 4th edition © 2000 by John C. Hull Tang Yincai, © 2005 1.9 Foreign Exchange Quotes for GBP on Aug 16, 2001 (See page 3) Bid(出价) Offer(报价) Spot 1.4452 1.4456 1-month forward 1.4435 1.4440 3-month forward 1.4402 1.4407 6-month forward 1.4353 1.4359 12-month forward 1.4262 1.4268
1.10 Terminologies The party that has agreed to buy has what is termed a long position(多头) The party that has agreed to sell has what is termed a short position(空头) Options, Futures, and Other Derivatives, 4th edition g 2000 by John C Hull Tang Yincai, C 2005
Options, Futures, and Other Derivatives, 4th edition © 2000 by John C. Hull Tang Yincai, © 2005 1.10 Terminologies • The party that has agreed to buy has what is termed a long position(多头) • The party that has agreed to sell has what is termed a short position(空头)