Derivatives without illusions
Futures, options, margin and expiry: how the contracts work, what the money is debited for every evening, and why leverage hurts even when the forecast is right.
9 steps · about 95 min · free
Start with step one →- 1Futures: An Obligation, Not an OptionArticle · 6 min
- 2Initial marginHow much money one position locks up.Glossary term
- 3Margin: Why Your Position Can Be Closed Without Your InvolvementWhy the position gets closed without you.Article · 5 min
- 4Options: a right without an obligationA right you pay a premium for.Article
- 5Strike priceThe price everything is built around.Glossary term
- 6Contango and backwardation: why a long futures position melts awayWhy a long position decays on its own.Article · 5 min
- 7Expiration: what happens on a contract's last dayWhat happens on the final day.Article · 6 min
- 8Hedging: insurance you pay for with returnArticle · 6 min
- 9Why leverage destroys the result even when the forecast is rightThe main reason for losses on this market.Article · 5 min