The instrument
that derives its value from underlying asset is known as derivatives. These Derivatives could be a
financial or a commodity. Various topics covered in this paper are
- Introduction
- Future and forward contract introduction
- Difference between Forward and future contract
- Future pricing and risk aversion theories( Normal Backwardation, Capital Asset pricing method)
- Trading Mechanism
- Spreads and their types
- Model of Future pricing ( Cost of carry model, Expectation model)
- Option Contract
- Types of option
- Call option and put option
- Option Pricing model (Binomial Model , Black Scholes)
- Financial Instruments
- Commodity
- Bonds
- Theories
** Note : All the model and theories has to be presented with detailed explanation, assumption, numerical and other requirements of theory or model presented in the book or notes.**
