Chapter 7: Derivatives Valuation and Applications

In this section

• Forward and Futures Contract Valuation
  Explore key concepts, practical strategies, and in-depth examples of forward and futures contract valuation, including the cost-of-carry model, marking to market, arbitrage, and real-world applications.
• Options Valuation and Strategies
  Explore the fundamentals of call and put options, discover payoff diagrams, delve into the Binomial and Black–Scholes–Merton models, examine option Greeks, and master common option strategies for hedging and speculation.
• Swap Valuation and Applications
  A comprehensive guide to understanding, pricing, and applying various types of swaps—including interest rate, currency, and equity swaps—along with practical insights and real-world examples.
• Advanced Derivatives Usage and Risk Management
  Explore how volatility and correlation-based products, clearing mechanisms, and strategic derivative overlays can mitigate risk and generate alpha in modern financial markets.