Forwards and Futures contract | Financial Derivatives | Strategic Financial Management | financial derivatives

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Handwritten Notes for Financial Derivatives will be uploaded soon

Strategic Financial Management

Financial Derivatives – Instruments for risk management

Topics covered in this video:
1. Forwards & Futures
a) Forward Contract
– It is an agreement to buy or sell an asset at a certain future date for a certain price
– A forward contract is traded in the over the counter market
– Usually between two financial institutions or between a financial institution & one of its
clients
b) Futures Contract
– Unlike forward contracts, futures contract are normally traded on an exchange
– To make trading possible (without default), the exchange specifies certain standardized
features of the contract
– Provides guarantee that the contract will be honored
2. Futures contract – Features
a) Standardization
b) Price Limits
c) Marking to Market
d) Margin requirement for trading
3. Futures contract – Advantages
a) Quick & low transaction cost
b) Price discovery function
c) Advantages to Informed Individuals
d) protection
e) Flexibility
f) Integrity
g) Leverage
4. Margins in Futures Contract
a) Clearing Corporation acts as legal counterparty to every transaction effected in Derivative
segment
b) Thus the party who loses fails to pay up, then the exchange is legally bound to effect
payment to the party who has made a profit
c) To ensure that it can meet these commitments, exchange levies margins on players in
Derivative Segment
d) Margin is the commitment money paid by both the buyer & seller based on volatility in any
derivative security trading in the market
e) The loss may or may not occur but the margin so calculated should be deposited
5. Margin can be of different types:
a) Initial Margin:
Amount a buyer/seller of a futures contract pays initially
b) Maintenance Margin:
Lower bound for the acceptable level of Margin. once the margin account
balance goes below maintenance, the margin call is triggered.
c) Variation Margin:
Amount needed to restore margin account back to the initial margin level
once a margin call has issued

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Handwritten Notes:

Check out the store:

CMA INTER

PAPER-5
Financial Accounting:

PAPER-7
Direct Taxation(first three chapters):
Income under the head Salaries:
Income from House Property:
Profits & Gains of Business or Profession:
Income under Head Capital Gains-
For those who want to Study with our Capital Gains videos:
Capital Gains Full Notes [Section 45-55]:
Capital Gains Revision & Examples:

For Revision purpose only:
Capital Gain Revision Notes:

For those who had already taken previous uploaded Capital Gains notes
Previous Upload: Capital Gains [Section 45-50CA]:
Purchase this for full coverage: Capital Gains [Section 54-55]:

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The income of Other Person included in Assessees Total Income Direct Taxation Handwritten Notes:

Set-off & Carry Forward of Losses Handwritten Notes:

PAPER-9
Operations Management & Strategic Management:

PAPER-10
Cost & Management Accounting:
Financial Management:

CMA FINAL

PAPER-14:
Strategic Financial Management:
Security Analysis & Portfolio Management:

Happy Studying 🙂
#futures
#forward
#derivatives
#sfm
#cmajunction .

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5 comments

jayanta baidya 26/09/2021 - 1:52 AM

Dear Ma'am,
I have 2 request
1st one is these notes are not available on site. So kindly upload i will be more helpful
And 2nd one is kindly upload and guide remaining portions. SFM is hardesr subject for me.
Please accept my request.

Reply
Subham Pasari 26/09/2021 - 1:52 AM

Hello mam when is the next video of forward coming waiting for examples

Reply
Rajyam Devarakonda 26/09/2021 - 1:52 AM

Madam plz upload the vedio of derivatives and forex

Reply
Janakki M.R 9th A 26/09/2021 - 1:52 AM

Mam thanks a lot.keep uploading more videos.

Reply
Yash vlog 26/09/2021 - 1:52 AM

Again thanks mam

Reply

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