What are the cash market derivatives?
Traditionally, money market tools are financial products that mature in one year or less. Therefore, financial products are financial products whose values come from the price of specific money market tools that are referred to as basic tools. The basic tools based on the most common monetary market derivatives include US Treasury accounts, Eurodollar Deposits (CDs), Federal Funds and Interest Rate. Vehicles that are commonly traded by cash market derivatives are futures, forward, possibilities and swaps, caps and floors. In addition, money market participants use cash market derivatives to help reduce the risk and/or increase revenues. The contracts were undertaken by the Buyer or the Seller to bring or provide the delivery of the cash market tools on a particular date at a specific price. Those who trade money by Arket Merivatives via futures may not take or provide underlying tools. This can be ideal forThose who want to benefit only from fluctuating prices on the market. They usually achieve this by getting out of the contract before the delivery date.
attackers are somewhat similar to futures, except that they are trading behind the counter (OTC), which means that on the stock exchange, but rather contracts usually between two parties. In pre -Copper transaction, one party agrees to deliver the cash market tool on a certain date in the future, within 12 months at a specified price. These transactions are usually designed to deliver basic tools.
options give the buyer and seller the right to buy or sell money market tools on a specific date or before a certain price. Using money in money helps either minimize the risk of loss or simply make profits. In some cases, however, like other types of derivatives, can increase the risk. Like futures are optionstraded on the stock exchange.
swaps are mainly fathers types of derivatives, although there are specific swaps traded on the stock exchange. One type of transaction, which includes swaps called interest swaps, allows people to exchange types of interest rates from variables to fixed and vice versa. These derivatives are used by those who lend or lend money and prefer to receive or make payments with the type of interest rate that differs from the one associated with the original loans or borrowed money.
Caps and floors are mainly used to control interest risks. In the basic sense, CAPS enables people to be protected if interest rates rise above a certain level. Floors do more or less the same, except that they protect people if interest rates fall below a certain level. In particular, the chars are used by those who borrow money for a variable rate so that they can be protected from growing interest rates, while floors use those who lend money to protection against interest rates.
InventionsTICE on the money market can be carried out through the money market fund, a type of mutual fund, which usually invests in the money market. Individuals and institutions can buy funds of money market funds. These shares remain for the same price, but the change in revenues - ie interest rates fluctuates, not shares. Investments in monetary market derivatives can be carried out through markets with futures and options from institutional and private individuals. Institutional investors can also use the type of OTC stores that are generally not viable for private individual investors.