Financial Derivatives

Watch the linked video for an introduction to derivative securities.

For more information, here is a very clear, in-depth video on derivatives: Financial Derivatives – Lecture 01. In this video he leaves out the details of swaps, so you can watch this video on swap derivatives: How swaps work – the basics

Inter-connected concepts:

Definitions

• Underlying asset
• Types of derivatives
  • Forward derivatives
  • Future derivatives
  • Swap derivatives
  • Option derivatives
    • Call option
    • Put option
  • Swap derivatives

Forward and Futures

• Forward contract
• Long position
• Short position
• Futures contract
• Marked to market

Options

• Exercise price or strike price
• Expiration date
• In-the-money
• Out-of-the-money
• European option
• American option
• Black-Sholes pricing formula
• Put-call parity