Derivatives and Risk Management

chapter 9

Equity Market Derivative Instruments

LEARNING OBJECTIVES

After reading this chapter, you will be able to understand

• various equity derivative products
• the margin system for equity derivatives
• application of equity derivatives as risk management tools
• usage of equity derivatives in mutual funds

CHAPTER OUTLINE

9.1 Introduction

9.2 Derivative Contracts

9.3 Margin System

9.4 Hedging Versus Speculation Using Equity Derivatives

9.5 Security Hedge Versus Portfolio Hedge

9.6 Performance of a Hedged Portfolio

9.7 Security Hedge Using Futures

9.8 Portfolio Hedge Using Futures

9.9 Security Hedge Using Options

9.10 Portfolio Hedge Using Options

9.11 Options on Futures

9.12 Employee Stock Option Schemes

9.13 Warrants

9.14 Convertibles

9.15 Derivatives ...