The two-sided nature of a futures contract: its meaning and relevance to OTC derivatives

Article Abstract:

The two-sided nature of a futures contract is analyzed and interpreted to differentiate it from insurance contracts, superannuation contracts, options, other instruments and other forms of derivatives not intended to be regulated by Chapter 8 of the Corporations Law. The analysis is done without deviating from the regulatory rationale of said chapter which applies to futures contract. The analysis resulted in the conclusion that the present definition given to a futures contract leads to conceptual confusions. It is recommended that the way a futures contracts is defined should be revised.

Contract Administration, Laws, regulations and rules, Contracts, Futures, Contract management

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The ins and outs of calls and puts

Article Abstract:

Derivatives have been linked to heavy losses such as those incurred by Nick Leeson, a trader whose activities led to Baring Brothers' collapse. There are two main types of derivatives, options and futures. Options give the right to buy or sell shares and can be used for hedging risks. Options can allow investors to make a profit if shares reach a certain price, or they may be worth nothing. Futures are a commitment to buy and can bring profits if prices, rise, but can also involve losses if prices fall.

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Grappling to get derivatives deals

Article Abstract:

J.P. Morgan heads the list of bank holding companies with the highest number of off-balance sheet derivatives contracts. With $3,989,539 in total derivatives, the company has extended its financial restructuring abilities to the derivatives field. It stresses delivery of simple transparent deals to its clients. Together with some bank holding firms, J.P. Morgan boasts of healthy balance sheets and double-A ratings.

Offices of Bank Holding Companies, Bank holding companies, Services, J.P. Morgan and Company Inc., JPM

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