213 reputation
311
bio website
location Class
age
visits member for 1 year, 10 months
seen Aug 6 at 2:01

App Spec

Interesting Articles:


May
14
comment Why does Futures contract credit and debit a position daily, if it has “locked” the price?
In this scenario - it looks like there's counter-party risk. Therefore both parties may be required to settle a bit of contract value based on the days passed on the contract. However I am still doubtful why current market price has to come in between it when a price is already locked, all Farmer and Baker have to pay is a fraction of locked price. In the event agreed goods are delivered by Farmer, he will be given back his settlements he did over the 1 year of time along the contract agreed price paid by buyer - the Baker.
May
14
comment Why does Futures contract credit and debit a position daily, if it has “locked” the price?
Greately appreciate the explanations. It has come down to three things for me. 1. (in Farmer/Baker case) Baker pays all cash upfront and Farmer has to deliver wheat in 1 year. Here I do not see why Farmer has to do any settlements with regards to current market price, when all he has to do is deliver the Wheat in 1 year (as days passed by, nearing 1 year). 2. Both Farmer/Bakers exchanges cash and Wheat in 1 year where they are only holding to a paper released to them by exchange when signing up for the futures contract.
May
14
revised Why does Futures contract credit and debit a position daily, if it has “locked” the price?
added important info to make question more specific and express doubts
May
14
revised Why does Futures contract credit and debit a position daily, if it has “locked” the price?
added important info to make question more specific and express doubts
May
14
comment Why does Futures contract credit and debit a position daily, if it has “locked” the price?
Then there are arbitrageurs who are interested in futures which are not rolling over but deliverying - if futures price lower than market price. My main question: This daily settlement is not for Farmer and Baker but for those traders who trade them. Price is locked for Farmer and Baker. But for those who trades in Exchanges - they have to fill for margin calls and maintain it until the expiry or last trade date. Is that correct view?
May
14
comment Why does Futures contract credit and debit a position daily, if it has “locked” the price?
Let's not narrate the question into Futures Risk vs Forward Risk. Futures have no counterparty risk - because of the regulated paper market and traded in exchanges. Fine. But there's basis risk coming from price fluctuations. The more I read, it seems like the people who trade Futures contract are not the ones who really not the Farmer and Baker. One of the reasons which confused me was that there are financial traders who trade futures contracts belonged to other people like Farmers and Bakers.
May
13
asked Why does Futures contract credit and debit a position daily, if it has “locked” the price?
May
12
comment Why is “full” Yield Curve (term structure of interest rates) 3 component based?
However to grasp and breath a bit understanding answer to my question (of title) - is it correct to accept that because yield curve doesn't come with all tenors, rates-desk or other industry players construct full curve by plugging in rates that they technically compared-proven to be the most liquid?
May
12
comment Why is “full” Yield Curve (term structure of interest rates) 3 component based?
@MattWolf You mean QLNet has a math library that I could use in VBA and C#? Well darn it's good. It's written in C# :D
May
9
asked Why is “full” Yield Curve (term structure of interest rates) 3 component based?
Mar
14
accepted How to hedge the fixed leg of a swap contract?
Mar
13
comment Why does it “say” portfolio diversification not suitable during market turmoil?
I accepted your answer, although it's a little beyond the technical playground I am at right now. But it does give me some insights to keep pushing.
Mar
13
accepted Why does it “say” portfolio diversification not suitable during market turmoil?
Mar
13
comment Why does it “say” portfolio diversification not suitable during market turmoil?
I re-read both answers. I am novice to most of the methods and getting my feet wet with it now. I felt the below guy had explained more - although your is conscice. At this point - I need descriptive - more technical, less conscice. I am sure I need all of you guys expertise :)
Mar
11
comment Why does it “say” portfolio diversification not suitable during market turmoil?
Contangion itself quite vast for me to absorb. I shall come back after more reading and experiments to appreciate these answers.
Mar
11
asked Why does it “say” portfolio diversification not suitable during market turmoil?
Nov
10
awarded  Popular Question
Oct
6
comment How do we use option price models (like Black-Scholes Model) to make money in practice?
I am still at a primary stage to appreciate your concise answer. Yet the jargon use itself can be my key words to search. +1
Oct
6
comment How do we use option price models (like Black-Scholes Model) to make money in practice?
+1 for asking the question and getting great answers. Because anyone who is going this way will face this question, including myself.
Oct
6
comment How do we use option price models (like Black-Scholes Model) to make money in practice?
I love this description. Makes me reason more and simple enough to dig in further.