In futures markets, the contracts have standardized terms and trade in a market that provides sufficient liquidity to permit the parties to enter the market and offset transactions previously created. The use of contracts with standardized terms results in relatively widespread acceptance of these terms as homogeneous agreed-upon standards for trading these contracts. For example, [...]

In this post, we take a brief look at the different types of derivative contracts. This brief treatment serves only as a short introduction to familiarize you with the general ideas behind the contracts. Let us start by noting that derivative contracts are created on and traded in two distinct but related types of markets: [...]

The concept of risk is at the heart of investment management. Financial analysts and portfolio managers continually identify, measure, and manage risk. In a simple world where only stocks and bonds exist, the only risks are the fluctuations associated with market values and the potential for a creditor to default. Measuring risk often takes the [...]

This struggle between investor creditor and company debtor is part of a mismatch of their risk-return appetites. Yet, there are various types of investor in the risk universe. Some are risk-bearing, some are risk-offering players. Professional investor/shareholder This category includes the class of professional investor – those who work in banks, fund managers and financial [...]

The stock-market collapse has emphasised the topsy-turvy world of investor euphoria and dismay. The shareholder public has suffered a crisis in confidence in those charged with the management of their investment, chiefly the corporate directors or CEOs. There has been a significant impact from corporate accounting scandals as two-thirds (62 %) of UK private investors [...]