Reading 48. Derivative Markets and Instruments
Learning Outcome Statements
a. define a derivative and distinguish between exchange-traded and over-the-counter derivatives;
CFA Curriculum, 2020, Volume 6
Subject 1. Introduction
User Contributed Comments 5You need to log in first to add your comment.
What is the difference between Forward Committment and Contingent Claims? As you break down the different methods of purchase why are some options available only through exchange and some OTC? Did you notice that only Options on futures and Exotic options and Asset back securities are available via one method only?
The specifics are explained in following LOS-notes
Read on, Baby!
"Derivatives are financial weapons of mass destruction" - Warren Buffett in 2002.
think of it this way. Forward "commitment" leaves you with no choice but to honour it. whereas contingent claim are dependant on something happening, thereby leaving an element of choice.
not scientific, but the reasoning helped me remember.