Chapter 1. Introduction ....................................................................................................

1
1.1 Exchange-traded markets ........................................................................ 2
1.2 Over-the-counter markets ........................................................................ 3
1.3 Forward contracts .................................................................................. 5
1.4 Futures contracts ................................................................................... 7
1.5 Options ................................................................................................ 7
1.6 Types of traders..................................................................................... 9
1.7 Hedgers.............................................................................................. 10
1.8 Speculators ......................................................................................... 13
1.9 Arbitrageurs........................................................................................ 15
1.10 Dangers ............................................................................................. 16
Summary............................................................................................ 16
Further reading ................................................................................... 18
Practice questions................................................................................. 18
Further questions................................................................................. 20