An FAQ Approach To Futures Markets

This book is meant to facilitate the learning of fundamental concepts on the part of the reader. This book cannot directly be used to acquire skills for trading in the market. One of the readers commented that my books do not enable readers to take a call on the market. I wish to state that I always approach my subject as a teacher and consequently the books are oriented towards my students. Some of the readers will go on to trade in the market. For this there are other books available on trading strategies and issues such as technical analysis. The study of such additional material is imperative for those who intend to master trading strategies. However I am of the opinion that there is a place for textbooks and other books that build a conceptual foundation, and all of us including professional traders need to start from first principles. In my executive education programs, some of the readers commented that they found the question and answer structure of this book to be very helpful for understanding the principles of forwards and futures. It is gratifying to know that even practitioners find this approach to be unique and illuminating. I have devoted separate chapters to each underlying product class. The objective has been to sequence the questions in such a way that, as far as possible, each question leads to the subsequent question. The level of mathematics has been deliberately kept at a very moderate level, and there are no proofs such as those that a reader will encounter in a conventional textbook. I have realized over the years that there exists a wider group of readers who wish to study the derivatives market and develop a feel and flavour for the subject, without having to navigate through a technical presentation. I am conscious of the need to facilitate the study of the subject by interested readers who may not have the required quantitative skillset. Consequently, this book is designed to cater to a wider audience - students at the Bachelors and Masters levels, and lay readers - who are interested in a logical, non-technical exposition of the concepts. Many of the questions that I have answered in this book were raised by my students. In other cases, I have attempted to simulate the mind of an inquisitive student, and provide the necessary answers. Derivatives, on financial products as well as on commodities, are attracting attention at a feverish pace all over the world. I hope that this book will serve to give a strong conceptual framework for people wishing to get acquainted with this fascinating field.