What you will learn
- Calculate contract notional and price-move exposure.
- Distinguish collateral requirements from maximum loss.
- Explain curve shape and imperfect hedging relationships.
Before you begin
Know the difference between a cash balance and an economic exposure, and be comfortable multiplying contract units.
Full lesson list
All lessons are freely available. No enrollment or payment is required.
Contract notional and exposure
- Use contract units rather than the deposit to measure exposure.
- Distinguish a futures price from a spot quotation.
Collateral and mark-to-market losses
- Track cash collateral separately from notional exposure.
- Recognize margin calls and losses beyond an initial deposit.
Curve shape and basis risk
- Separate curve shape from a forecast of spot direction.
- Recognize why a related contract is not a perfect hedge.