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Commodity Derivatives
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Like most asset classes, commodity derivatives consist of the traditional building blocks: forwards, futures, swaps, and options. The main structures used by investors to take exposure to commodities are exchange-traded products, total return swaps, and structured notes. This chapter discusses the main features of each of these products within an investment context. For example, the coverage focuses on using exchange-traded futures to compile investment indices. The section on swaps examines the total return variant of the classic “fixed for floating” structures. Because the fundamentals of derivatives are generally well documented, this chapter highlights the instances in which commodities differ from traditional financial assets. The chapter includes some popular investment structures to illustrate the use of these instruments.
Title: Commodity Derivatives
Description:
Like most asset classes, commodity derivatives consist of the traditional building blocks: forwards, futures, swaps, and options.
The main structures used by investors to take exposure to commodities are exchange-traded products, total return swaps, and structured notes.
This chapter discusses the main features of each of these products within an investment context.
For example, the coverage focuses on using exchange-traded futures to compile investment indices.
The section on swaps examines the total return variant of the classic “fixed for floating” structures.
Because the fundamentals of derivatives are generally well documented, this chapter highlights the instances in which commodities differ from traditional financial assets.
The chapter includes some popular investment structures to illustrate the use of these instruments.
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