While it focused on the valuation of a financial option, Black and Scholes (1973) also discuss using this methodology on real assets as the underlying instrument
In addition, as a leveraged product - you're required to place an initial deposit which makes up only a small fraction of the underlying instruments
analysis of current holdings and intended purchases in 2008 by product type, primary underlying instrument
of investment, specific geography of investment, specific business sector of investment and style of investment;
A deeper analysis follows in which the author examines how the value of a bet is dependant on the passing of time, the volatility of the underlying instrument
plus the price of the underlying instrument
Variance futures measure the difference between the expected and actual variance of an underlying instrument
over a fixed time period.
Its low margin feature means you only pay a small percentage of the underlying instrument
as your initial deposit; making it easier for the 'average Joe' like you and me to start trading the financial markets when we have little capital - in comparison - to play with.
Spread betting, as an alternative to more traditional forms of trading, is easy-to-access due to its low margin feature requiring only a small percentage of the underlying instrument
as a deposit.
Speculators can take advantage of underlying instrument
price movements without having to take possession of the underlying and portfolio managers can hedge their portfolios without having to liquidate their holdings.
As ETF strategists, the investment team has a thorough understanding of the underlying instruments
, which enables better asset allocation decisions and risk controls.
08 improving the quality of services in the ministry of labour and social policy with funds from the operational programme human resources development 2007-2013 with subject prepress, design and printing of the data dictionary for consultations on the typical questions, interested consumers, policies portfolios minister of labour and social policy contained underlying instruments
and rules for their application.
Short-selling bans hurt liquidity in the underlying instruments
, especially because they typically come at a time of market distress - when liquidity is already challenged.
Commodity and currency futures prices are tightly linked to the prices of their underlying instruments
, with futures prices highly sensitive to price movements of the underlying.