Trading Derivatives

Overview


Derivatives can be used to hedge the risks in a portfolio, but also can be used for speculative trading as well.

Topics


  • Payoff Diagrams - diagrams of the payoff of a derivative vs the underlying.
  • Trading Mechanics - discusses some of the operational issues of trading derivatives.
  • Trade Strategies - different strategies employed to try to make money from derivatives
    • Trading the Underlying - placing trades in a derivative based on a hypothesis about the underlying.
    • Derivative Mispricings - trading a derivative because the derivative itself appears to be mispriced.
  • Pnl Attribution is the process of attributing the daily pnl of a derivative contract to the various factors that affect the price.