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| AbroadPlanet Forums -> Brat-3: ACTR Students Community | Post new topic |
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06-Feb-2001 04:17 AM |
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Commander |
Hey Yerkin , here is a new lesson for you...
I want to ask Alina about derivatives...very very interesting topic...we all know that Wall Street cool guys try to reduce their interest rate risk and currnecy exchange risk using special strategy called - hedging the risk... As a financial instrument they use certain type of assets, basically derivatives...those are financial vehicles that derive their return from the instruments they are based on. Main types of derivatives used through out the world are: forwards, futures, options (puts and calls)... So Alina, please tell me what the major feature of difference between forwards and futures, because they both determine special aquared obligation to deliver commodities, financial assets or currency at the specified quantity and specified determined terms by the predetermined date in future... ------------------------------ Waiting for your answer, and remember - this is not a test, this is just a "study" process for all of us... Yerkin you are welcome too... [Brat 3: Delaware University I] |
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06-Feb-2001 03:15 PM |
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Commander |
hi Alina, what's up beautiful Armenian girl (that's exatly how we call Angela here, especially Georgians)... I am staying pretty well, except that damned internhip, no any news from INS, i m pissed off with all that scrap, anyway i m not losing my hope to obtain that approval sometime from now by May 12... (i am fulish, am not I ?)
Why you didn't answer my question, i posted it yesterday but no response as of Tesday February 6, 10.15am?? Are you trying to find an answer in a book, that's not fair (I am kidding), i want to know your pont of view, not authors'...Anyway, waitng for your knowledge, i am the greatest consumer of "free of charge" knowledge (i can barter with you for my knowledge tooo.) Yekin you are welcome too... And don't pick up my mistakes, the keyboard i mulfunctioning, so it's had to type and the rest of computers are now busy.. See you guys here later on. ----------------------- Kirill Zuykov (Ukraine) [Brat 3: Delaware University I] |
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06-Feb-2001 04:01 PM |
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Alincho |
Hi, Kirill!
I was very busy with my online photo album yesterday and haven't checked the portal. But I found it today and the question you are asking is very basic knowledge for someone interested in finance. Yerkin might have just started to learn about futures, forwards and put-call options. But I am pretty good at those darling. Forwards and futures have very small subtle difference. Forwards are instruments in the form of a contract (as the rest are) between two specific parties as yoy very nicely said to trade commodities, currencies at certain dates in the future with specific terms. Futures are nothing but publicly traded forwards. That's all I can say, and I hope this satisfies you and Yerkin. Any questions, you're welcome... XOXO Alincho [Brat 3: Delaware University I] |
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07-Feb-2001 03:50 AM |
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Commander |
Ok , Alina i like you strong style of answer, but i am not your proffesor and because of that i can't say that you satisfied me... If i could start business now i would certainly take you as a partner, you are brilliant girl Alinka, but don't be so quick in your answer...
Because the main difference is not particularly and clearly in what you stated.. Of course, forwards could be theoretically traded at the futures market ...but not practically, because those contracts are very expensive (huge amounts of money) and hence low luquidity... Ok, forwards, on my mind, are just separate contracts, with specified features and negotiated terms...they need price settlement only at the final maturity day...Futures are derivatives that use price settlement each day...you are keeping track of them as of stock.. More, futures are standartized insruments, so no specail negotiations... and specific portions of money (like common currency future is of 62000 pounds sterlings) or whatever. What about options Alinka ?? ------------------------------------- OF course you are right in many things, but sometimes you need help too, don't you?? Kiril Zuykov [Brat 3: Delaware University I] |
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07-Feb-2001 02:04 PM |
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Alincho |
Yeah, sometimes I do need help like yesterday when I was doing an income summary for this problem set. I hate accounting!!!! I get so confused in it. Give me theoretical stuff like you were asking and I won't be complainin.
Options.... Tricky things, especially their pricing. Options give you a rigth to by or sell smth on a certain day at a certain price. You are welcome not to use the right, but then you lose the money you paid for the option. Put options are for buying and call options are for selling, ili naoborot, nepomnyu, i chestno govorya spat' xochu  But they are useful things.
Hey, Kirill, looks like Yerkin doesn't need this... No comments lately... Thanks for your trust anyway... XOXO Alincho [Brat 3: Delaware University I] |
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07-Feb-2001 03:08 PM |
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Commander |
Ok, Alina if you are not bored with all that staff we are doing here during our virtual classes in finance then please reveal all your knowledge about new features in banking, like ..let's say securatization at first...
What's "securatization" and "mortgage-backed securities", GNMA And Fenni May and s on and so far... Please don't think i am using you as a teacher or substitute not to read books and study by myself nut just to listen what you are writing to me...No, that's not a truth..I know all that scrap, but sometimes i need someone to share his or her ideas on the same subject with me, and Americans can't support me in this question, they sometimes are not able to understand the elementary things, like bonds or say current yield etc.. So, waiting for your answer, and will say something to encourage you to answer, securatization delas with pools of securities, backes by the saving institutions as common... ------------------------ Sincerely Kirill Zuykov [Brat 3: Delaware University I] |
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07-Feb-2001 09:29 PM |
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Alincho |
I haven't covered that part theoretically. But I know practically what that means. Basically that means turning something that's not a security into security. Sound weird??? OK
Let's say you're a car dealer. You give loans to people. So basically you gather a bunch of loans, you pool them tak skazat', and you sell this debt to someone else like ordinary security, debt instrument. So the people that took the loan, and will be making interest payments, are paying not to the car dealer, but whoever got the new securities. That's about as much as I know. I don't know any definitions or anything but I know how it's done in practice and also I know that it's becoming easier and easier with every day, and giving some companies a chance to raise big cash in times of emergency by selling their debt. If you got any info, I'd be more than glad to hear, 'cuz I haven't covered that yet. XOXO Alincho [Brat 3: Delaware University I] |
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08-Feb-2001 02:48 AM |
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yerkin |
sorry, guys, domashki po gorlo. Kak tolko, tak srazu, na week-end tochno napishu thoughroughshii otvet.
U menya na etoi nedele presentation po Corporate Finance, domashka po Macro (kotoruyu ya uzhe prokakal, sfbl) i recursion homework po Data Structures and Algorithms. Justified? [Brat 3: Delaware University I] |
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08-Feb-2001 07:51 PM |
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Alincho |
By the way, Yerkin
"Thorough" is the word, a ti shto to drugoye napisal... XOXO Alincho [Brat 3: Delaware University I] |
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