CMA's financial derivatives must recite knowledge points.
The general principle is to reduce the risk by locking (future) price → hedging.
I. Forward contracts
The two sides eliminate the uncertainty by locking the price, and then eliminate the risk.
In order to avoid the risk caused by price increase, the buyer buys goods at the agreed forward price, that is, holds long positions.
In order to avoid the risk brought by the price drop, the seller sells the goods at the agreed forward price, that is, holds a short position.
Two. futures contract
The two sides eliminate the uncertainty by locking the price, and then eliminate the risk.
Difference from forward contract
In the exchange, pay a deposit to ensure the ability to perform.
Mark-to-market operation, that is, the parties to futures contracts need to settle profits and losses with the exchange every day.
Buyers and sellers avoid risks by holding long positions (buyers) and short positions (sellers).
Regardless of the spot price of a futures contract when it expires, the buyer of the futures contract always uses the futures price to calculate its cost, while the seller of the futures contract always uses the futures price to calculate its income.
Third, swap contracts.
(1) interest rate swap
Replace fixed interest rate with floating interest rate.
Replace floating interest rate with fixed interest rate.
(2) Currency swap
Replace the debt of one currency with the debt of another currency.
Four. Option call option (call option)
(1) The holder of basic intention has the right to purchase an asset at the agreed exercise price, and the holder locks in the highest cost (exercise price) of purchasing the asset.
(2) The basic exercise condition for holding a call option: the stock market price.
gt； Net profit and loss of exercise price holder = stock market price (income) _ exercise price (highest cost) _ option cost holder breakeven point = exercise price+option cost.
(3) The net profit and loss of the call option seller = exercise price _ stock market price+option cost The seller's breakeven point = exercise price+option cost.
Verb (abbreviation for verb) put option
(1) The holder of basic intention has the right to sell assets at the agreed exercise price, and the holder locks in the lowest income from selling assets (exercise price)
(2) The basic exercise condition for holding a put option is the exercise price.
gt； Net profit and loss of stock market holders = exercise price (minimum income) _ stock market price (cost) _ option cost holders' breakeven point = exercise price _ option cost.
(3) The net profit and loss of the seller selling the put option = stock market price _ exercise price+option cost = seller's breakeven point = exercise price _ option cost.
Repayment structure of intransitive verb options
(1) Parity option: asset price = exercise price;
(2) In-price option: the option holder chooses to exercise, and the option is in real value;
(3) Out-of-price option: the option holder gives up the exercise; Virtual value state of options;