Derivative markets, underlyings, payoffs, and no-arbitrage pricing

By the end you’ll be able to

• describe the major types of derivative contracts, the role of the underlying, and the uses of derivatives for risk transfer, speculation, and arbitrage
• distinguish between exchange-traded and over-the-counter derivatives, including key differences in customization, counterparty risk, liquidity, and margining
• calculate and interpret the payoff and profit to long and short positions in forward commitments and contingent claims