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Derivatives Questions

Derivatives Questions

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Published by Anand Gautam
Important areas in derivatives
Important areas in derivatives

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Published by: Anand Gautam on Sep 29, 2013
Copyright:Attribution Non-commercial


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Exchange-Traded Derivative Market Activity
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What is the role of futures and options in global portfolio management? How does an appreciation of volatility and correlations in futures markets assist in risk management or portfolio construction. What are the methods for using futures and options as hedging instruments for managing risk? What are the Implications of using exchange-traded futures and options to manage counterparty risk? Are there alternative measures of volatility that may provide better indications of future volatility for use in risk management or portfolio construction? What is the potential role of exchange-traded derivatives in relation to fostering trade between China and its trading partners?

II. Structure of Derivative Markets
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How is market liquidity affected by high frequency trading and other speculative activity? How have market depth, volatility, and liquidity evolved over time given the transition from pit to electronically traded derivatives markets? How is the categorizing of market participants either as speculators or as hedgers useful in the analysis of how futures markets work and their contribution to economic activity? Are there alternative user classification systems that might offer additional insights into how exchange-traded derivative markets work in practice? How have FX futures markets been impacted by the banking capital adequacy crisis in Europe related to the sovereign debt problems?

III. Global Regulation of Derivative Markets

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What would the impact of a transaction tax be on the futures markets? How much would activity be reduced whether by lower volumes or volumes switched or lowercost jurisdictions? How would liquidity be impacted and would there be any impact on hedging and risk management efficacy? What role did the futures markets play in the financial meltdown of 2008 and how comparable is that to past financial crises such as 1987? What are the big challenges in the coordination of global regulation of exchangetraded derivatives? What are the main differences in models for regulation used by different countries and jurisdictions? How do these differences impact market participants?

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