Futures contracts and options contracts


Problem: Make a Power Point with details about the differences between using futures contracts and options contracts in order to reduce risk.

- Are there any advantages to using one of the instruments over the other

- Is one of these more effective than the other?

- Are the costs of each different?

- Calculate how many call options contracts would be needed if you were trying to hedge a portfolio of 200 shares of stock.

- Please give concrete explanations of each and also make examples where it would be more appropriate to utilize an options contract over a futures contract and vice versa.

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Finance Basics: Futures contracts and options contracts
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