Futures and Options - Mechanics and Markets

Duration:
1 day
Location:
Prague, NH Hotel Prague
  • General Introduction to Futures and Options
  • Futures and Options Glossary
  • Global Futures and Options Markets
  • Money Market, Bond, Equity and FX Futures
  • Commodity, Energy, Weather and Macro Futures
  • Clearing and Settlement of Futures and Options
  • Applications of Futures and Options
  • Risks of Futures and Options
The objective of this warm-up seminar is to give you a general introduction to futures and options and a general understanding of the uses of these instruments for trading and risk management purposes.

The seminar is targeted towards those who wish to extract maximum value from subsequent participation in the "Futures and Options – Analysis and Strategies" seminar.

We start with a brief introduction to futures and options, explaining the advantages and disadvantages of these instruments. We describe the basic "mechanics" of the instruments, illustrated by pay-off, P&L and time profile diagrams, and explain some of the most important terms in the futures and options "glossary".

We then give an overview of the futures and options markets, and we present selected examples of futures and options on bonds, Eurodollars, equity indices and other types of financial assets. We also look at non-financial contracts such as weather, energy, commodity and macro futures. We explain how the instruments are traded, cleared and settled on important international exchanges such as Eurex, and the newly merged CME/CBOT.

Next, we give an overview and examples of the basic uses of futures and options for trading and hedging purposes.

Finally, we briefly discuss the inherent risks associated with the use of futures and options.

09.15 - 12.00 General Introduction to Futures and Options

  • The Difference between Listed and OTC Instruments
  • What are Futures and Options?
  • Examples of Important Contracts
    • Money market, bond, equity and FX futures and options
    • Commodity, energy, weather and macro futures and options
  • The Mechanics of Futures and Options
    • Time profiles and pay-off profiles
    • Value and P&L diagrams
  • Futures and Options Glossary
  • Exercises: Futures and Options Diagrams

Futures and Options Markets

  • Overview of Major Futures and Options Markets
  • How Futures and Options are traded
    • Open outcry systems
    • The “language” of traders
    • Electronic trading systems
    • Order types and execution
  • Case Studies
    • CME/ CBOT
    • Euronext/Liffe
    • Eurex

12.00 - 13.00 Lunch

13.00 - 16.30 Clearing and Settlement of Futures and Options

  • What Happens after the Trade is executed?
  • The Role of the Clearing House
  • Margin Systems
  • Daily Settlement
  • Final Settlement and Delivery

Applications of Futures and Options

  • Overview
  • Trading with Futures and Option
  • Risk Management with Futures and Options
  • Risks of Futures and Options

Small Quiz

Evaluation and Termination of the Seminar

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