ChDerivativere.docVIP

Ch 18 Derivative instruments How do companies buy and sell on spot and futures markets? On a spot market, producers and buyers buy and sell commodities (corn, metals, rubber, crude oil and other raw materials,) and currencies for immediate delivery. On futures markets, traders also make contracts to trade or deliver commodities and currencies at a future date with the price fixed at the time of the deal. They prefer to hedge, so as to guarantee next season’s prices for the underlying assets they will purchase. When traders or speculators might buy or sell a currency at a future price if they anticipate or can’t make sure that the price will appreciate or depreciate, or if interest rates will change. One solution to control the future risk of the currency rate fluctuations is to buy or sell the currency with the price fixed at the time of the contract on a futures market in currency exchange. If traders predict that RMB will continue to appreciate against US dollars in the next season, its prices are likely driven up or at a premium on futures market as well on spot markets. If RMB are expected to depreciate against Euros, its future prices are expected to fall, its prices on spot markets are at a discount. When future prices are expected to stay the same, future prices are also higher, as they include interest costs. Hedging on futures markets is seen as a protection against price changes caused by changes in the supply and demand, interest rates, currency exchange rates. 70年代高通货膨胀率以及普遍实行的浮动汇率制度，规避通货膨胀风险、利率风险和汇率风险成为金融交易的一项重要需求。衍生工具能有效地转移投资者某些不愿承担的风险给愿意承担者。 Singapore Airlines have purchased half of their gasoline reserves on futures market Why do traders or speculators hedge on futures market in stocks and shares? 套期保值、对冲 A call option (看涨期权）gives its holder the right to buy but not the obligation to buy a fixed quantity of security, commodity or currency at a fixed /certain price during a certain period of time. A put option （看跌期权）gives its holder the