Financial Derivatives: Options, Warrants and Futures
Here are some articles about option trading strategies, option pricing, Black Scholes, Spread trading and other higher-risk investments or derivatives, including some rather obscure investments. What are derivatives, stock options and warrants?
WARNING: None of this information is a recommendation to invest and some of the derivatives discussed here can be very risky.
Table of Contents: Financial Derivatives: Options, Warrants, Futures...
- Derivatives on Wikipedia
- Warrants and Options
- Warrants
- Investing in Warrants and Options
- Preference Shares
- Zero Dividend Preference Shares
- Spread Trading Shares, Commodities and other Markets
- Option Pricing (Black Scholes Equation)
- Featured Lensmaster
- Get Rich Quick
- More Investment Books
- Option Pricing Made Easy
- Other Classes of Share/Stock
- Or Buy Some Gold....
- Some More Featured Lenses
- Some More Conventional Investment Ideas
- All About Me
- Please Leave Some Feedback
- Please Twitter Follow AndyPo
Derivatives on Wikipedia
A derivative is a financial instrument that is derived from some other asset, index, event, value or condition (known as the underlying asset). Rather than trade or exchange the underlying asset itself, derivative traders enter into an agreement to exchange cash or assets over time based on the underlying asset. A simple example is a futures contract: an agreement to exchange the underlying asset at a future date.
Derivatives are often highly leveraged, such that a small movement in the underlying value can cause a large difference in the value of the derivative.
Derivatives can be used by investors to speculate and to make a profit if the value of the underlying asset moves the way they expect (e.g. moves in a given direction, stays in or out of a specified range, reaches a certain level). Alternatively, traders can use derivatives to hedge or mitigate risk in the underlying, by entering into a derivative contract whose value moves in the opposite direction to their underlying position and cancels part or all of it out.
Derivatives are usually broadly categorised by:
* The relationship between the underlying and the derivative (e.g. forward, option, swap)
* The type of underlying (e.g. Freight derivatives based on Baltic Exchange shipping indices), equity derivatives, foreign exchange derivatives and credit derivatives)
* The market in which they trade (e.g., exchange traded or over-the-counter)
Warrants
and Options
Warrants and Options
Warrants and Options can be used to protect you portfolio or add leverage for a limited amount of time. These are contracts that give you the option (i.e. the right, not the obligation) to buy or sell ("call" or "put") something (a share, stock, commodity etc.) at a certain price (The Strike Price) on a certain date.
Warrants and Options may be bought and sold on any date, but the price is variable and depends on the value and volatility of the underlying asset, time left to maturity. The price can be calculated using complex equations...
Warrants
-
Investment Trust Warrants
-
Investment trusts are collective investments similar to mutual funds or unit trusts, but generally with lower fees and are actual investment companies with shares that can be traded, rather than units representing the underlying investment holdings (...
Investing in Warrants and Options
Options as a Strategic Investment
Amazon Price: $53.55 (as of 12/28/2009) 
Options As a Strategic Investment (4th Edition Study Guide)
Amazon Price: $26.37 (as of 12/28/2009)
Real Options: Managing Strategic Investment in an Uncertain World (Financial Management Association Survey and Synthesis Series)
Amazon Price: $28.00 (as of 12/28/2009)
Real Options Analysis: Tools and Techniques for Valuing Strategic Investment and Decisions, 2nd Edition (Wiley Finance)
Amazon Price: $47.25 (as of 12/28/2009)
TurnKey Investing with Lease-Options: How to Simply & Safely Create 12% Returns with Investment Property!
Amazon Price: $24.95 (as of 12/28/2009)
Preference Shares
Preference Shares
Preference shares are a different class of share to "Ordinary" Shares and pay out to their holders before other classes of share (but after bond holders and bank debt) generally making them safer. They are a useful variant to ordinary shared to reduce the risk of a portfolio.
Please see the full article here
Zero Dividend Preference Shares
What are Zero Dividend Preference Shares?
-
Absolute Investment Returns: Buy ZDP Shares (Zeros)
-
Zero Dividend Preference Shares are a little known sub-class of investment trust share (the safest variety of "Split-Capital" investment trust) which provide almost guaranteed capital gain with a defined end-date. Usually very safe, even in these tur...
Financial Spread Trading
Spread Trading Shares, Commodities and other Markets
Spread Trading can be a very risky (but tax-free) way to play the market or it can be used to hedge against market risk. Spread-trading derives a profit if a certain outcome occurs. It is however a legitimate investment technique and has tax-advantages over owning the asset on which you are betting. Also you can go long or short (i.e. make money from the market moving in either direction)
Please see the full article here...
Option Pricing
Option Pricing (Black Scholes Equation)
Ever wondered how to price an option or a warrant? Here is an article explaining how this is done This is the standard method of working out the value of options or warrants from the value and volatility of the underlying asset, time to maturity etc. based on physics equations used to model movement of atoms (Brownian Motion) i.e. assumes the markets are random.
Get Rich Quick
More Investment Books
Trading Options For Dummies (For Dummies (Business & Personal Finance))
Amazon Price: $16.49 (as of 12/28/2009)
Stock Options for Dummies
Amazon Price: $14.95 (as of 12/28/2009)
Futures & Options For Dummies (For Dummies (Business & Personal Finance))
Amazon Price: (as of 12/28/2009)
Option Pricing: Black-Scholes Made Easy (Wiley Trading)
Amazon Price: $61.43 (as of 12/28/2009)
Option Pricing Made Easy
-
Black Scholes Option Pricing Made Easy!
-
This article is about how to value stock options and warrants using the Black and Scholes Option Pricing Model, which is the usual model used to value options, warrants and some other derivatives. There are many books on the subject, but I shall try...
Other Classes of Share or Stock
Other Classes of Share/Stock
-
Split Capital Investment Trusts
-
Investment trusts are collective investments (stocks, shares, property, commodities etc.) similar to unit trusts and mutual funds but with some big advantages. They are, however more complicated and to make things even more complicated some investme...
Or Buy Some Gold....
Fetching new data from eBay now... please stand by
Some More Featured Lenses
-
Safe Investments For Uncertain Times
-
How to invest money in these difficult times? If you have a lump-sum to invest, or even if you just want to preserve what money you have accumulated, in these tough times, how would you invest for a comfortable life? The "Credit Crunch"...
-
Great Investment and Money Making Ideas
-
Have you ever been stuck for investment ideas? What should I invest in at the moment? Which stocks are good value? Which markets or investment vehicles should you invest in?This article attempts to cut through some of the jargon and provide some safe...
-
Financial Engineering for Individuals and Small Companies
-
Financial Engineering is a complex process used by large companies to ensure that they can fulfill their financial obligations at certain times in the future. It is however just as relevant for individuals and small companies. We cannot accurately...
Some More Conventional Investment Ideas
-
Investing in Exchange Traded Funds - ETFs
-
Exchange Traded Funds or ETFs are an alternative to other kinds of collective investment funds, such as Mutual Funds, Unit Trusts or Investment Trusts ETFs are a relatively new invention, especially in the UK, but in the USA there are many hundreds t...
-
Investing in Investment Trusts
-
What are Investment Trusts and why should you invest in them? This article is all about the advantages (and disadvantages) of these relatively unpopular equity investments. They are generally only purchased by experienced investors because they are...
-
Investing in Bonds
-
How to invest in bonds: Corporate bonds; Government Bonds (or "Gilts" in the U.K. "Treasuries" in the US) and what are bonds? While stock markets have suffered during recent economic turmoil, bond markets have been more secure. They have not been im...
All About Me
Lensmaster AndyPo has been a member since July 7 2008, has rated 2,042 lenses, favorited 1,959, and has created 207 lenses from scratch. This member's top-ranked page is "Ferrari 308 - Affordable classic (Magnum's car)". See all my lenses
My Bio
Hi, I am Andy. I live in the U.K. but have worked and travelled all over the world. I am a semi-professional wildlife and travel photographer (i.e. I sold a couple of photos once), semi-retired consultant physicist (i.e. unemployed boffin) with a keen interest in finance (i.e. get rich quick..ly):
My Home Page, More About Me!, My Blog and My other publications
My Newest Lenses:
Bentley Turbo R
How to Hedge your Inveatment Portfolio
Apple Mac Computers, Software etc.
Volterra in Italy
Etosha National Park
Turtle Island, Borneo
Chianti Road, Tuscany, Italy
Chobe National Park, Africa
Danum Valley, Jungles in Malaysia
Lens Of The Day (Twice) and a purple star: "Rain Forests of Borneo" - 20th AND 30th November 2008
Please also check out my Zazzle Gallery
And a few other publications:
Safari in Botswana
Understanding ETFs (Exchange Traded Funds)
Rio de Janeiro: A Travel Diary
Waterfalls in Brazil and Argentina
Bangkok, Thailand (during a military coup)
Tiger Safari in India
Marrakech, Morocco
Vacation in Cuba
African Safari: Namibia
Classic Car Review: Ferrari 308 GTS
Car Review: Jaguar XJ12, Daimler Double Six
Car Review: Jaguar XKR
Investing in National Savings Premium Bonds
How to Reduce Risk of Your Investment Portfolio
Investing in Corporate Bonds
Check out these great lenses...
-
- Make Money From Home
There are many ways to make money from home and there is a lot of money out there on the internet to be had, but there are also a lot of people chasing the money. This article is about my research: The methods I have tried and the results I have achi... view lens -
- Wildlife & Travel Photo Gallery
After many years of traveling the world and taking photos, mostly of wildlife and nature and I have published some of them in a Zazzle Gallery. Here is a selection of some of these photographs and links to the associated Zazzle productions; cards and... view lens -
- Safari and Wildlife Viewing
Here is a selection of articles and reviews of safari holidays and wildlife viewing vacations in various parts of the world: Africa (Namibia and Botswana), Borneo, Canada, USA and Asia... Lots of photographs, travel tips, advice and recommendations,... view lens -
- European Travel Highlights
A quick photographic tour of Europe to some of my favourite bits and links to a few more of my more detailed european travel articles, including: Tuscany in Italy Loire Valley and Brittany, France Gibraltar, U.K. (Near Spain) Richmond, London, Engla... view lens -
- Great Investment and Money Making Ideas
Have you ever been stuck for investment ideas? What should I invest in at the moment? Which stocks are good value? Which markets or investment vehicles should you invest in?This article attempts to cut through some of the jargon and provide some safe... view lens
Please Leave Some Feedback
-
Reply
- JaguarJulie JaguarJulie Aug 18, 2009 @ 11:07 am
- Andy, gosh -- no offense, but for me "Financial Derivatives: Options, Warrants and Futures" is probably my bedtime story. ;) But, you've covered that topic nicely!
-
Reply
- qlcoach qlcoach Jun 1, 2009 @ 10:57 am
- Enjoyed your lens as always. You have great squidoo power. Found this lens on Squidom. Hope you will visit my new lens about emotional healing. Gary Eby, author and therapist.
-
Reply
- sandyspider sandyspider May 22, 2009 @ 9:36 am
- Another great one. 5*s
Please Twitter Follow AndyPo
- AndyPo
- aka Andy Porter
- 1,235 followers
- 1,950 following
-
- Time to Start Investing in Gold and Silver Miners (instead of the metal)? / http://tinyurl.com/ybum5g7
-
- I still don't like the new Jaguar XJ what's wrong with the old design?: Jaguar XJ12/Daimler Double Six / http://tinyurl.com/68vd52
-
- I just joined RedGage where I can get paid for my content. http://www.RedGage.com/AndyPo
-
- What is The Carry Trade? How to make money from low US interest rate / http://tinyurl.com/ylftsex
-
- I found many ways to make more money than HubPages: http://www.squidoo.com/makelotofmoneyfromhome #HubPages http://twttrlist.com/A19u
by AndyPo
Explore related pages
TradeKing Review- This is a complete TradeKing Review including features, accounts, and company hi...
Black Scholes Option Pricing Made Easy!- This article is about how to value stock options and warrants using the Black an...
Investment Trust Warrants- Investment trusts are collective investments similar to mutual funds or unit tru...
Safe Investments For Uncertain Times- How to invest money in these difficult times? If you have a lump-sum to invest,...
Great Investment and Money Making Ideas- Have you ever been stuck for investment ideas? What should I invest in at the mo...
Lensography Retire Young and Travel The World...- I am a semi-professional travel photographer (i.e. I once sold a few photos) and...
