How Do I Determine the Fair Value of Derivatives?
Financial derivatives (derivatives) refer to a type of financial contract whose value depends on one or more underlying assets or indexes. The basic types of contracts include forwards, futures, swaps (swap) and options. Financial derivatives also include hybrid financial instruments with one or more of the characteristics of forwards, futures, swaps (swap) and options. [1]
Financial derivatives
(A financial contract)
- Financial derivatives have the following characteristics:
- 1.Zero-sum game
- The parties to a contract transaction (in
- (1) According to the product form, it can be divided into
- The micro-subjects of financial derivative product risks are caused by weak internal controls.
- (One)
- Regarding the regulation of financial derivatives, internationally, corporate self-control, industry associations and
- Regional distribution structure of financial derivatives:
- In 1865, the Chicago Grain Exchange introduced a standardized protocol called a "futures contract", replacing the forward contract that has been in use since 1851, becoming the earliest financial derivative developed in human history. Early participants in the futures market were mainly for the purpose of hedging forward risks
- Open a college
- 1. Enrich and expand the variety of financial derivatives.
- 2. Independent innovation, perfect financial derivatives in design.
- 3. Define responsibilities and strengthen supervision and management of financial derivatives.
- 4. Formulate laws and regulations so that supervision can be followed by law.
- 5. Strengthen information disclosure and increase market transparency. [2]