futures-contracts

Learning objectives: Define and describe financial assets. Define short-selling and calculate the net profit of a short sale of a dividend-paying stock. Describe the differences between forward and futures contracts and explain the relationship between forward and spot prices. Calculate the...

Learning objectives: Calculate the profit and loss on a short or long hedge. Compute the optimal number of futures contracts needed to hedge an exposure and explain and calculate the “tailing the hedge” adjustment. Explain how to use stock index futures contracts to change a stock portfolio’s...

Dollar beta adds (or subtracts), so we neutralize beta by offsetting dollar beta which is portfolio value multiplied by portfolio beta; or, for the hedge, dollar beta is number of contracts multiplied by notional value per contract (assuming S&P index futures contract with beta ~ 1.0). David's...

Hey all, Can you please elaborate on the following line a bit more : " Future contracts and Forward contracts are priced to have zero value at the time an investor enters into the contract". It seems a bit confusing to me. As I think that this line can be very important, I would like you to help...