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  1. Sir,

    For currency future, if the question doesn’t tell the spot rate on the closing date, how are we going to find such spot rate? Thank you.

  2. Hi John, thanks for the Lectures they are really a great help.

    I am having trouble estimating the futures price based on interpolation between 2 Futures prices, when a transaction occurs before the expiry of the relevant futures contract. My query is specific to the apportionment of the duration as in Q1b (ii) Lirio Co. March/June 2016 and Q1a CMC Co. June 2014.

    Thanks for what you can tell me.

    • Please ask this in the Ask the Tutor Forum, and not as a comment on a lecture.

      (There are lectures working through the whole of the question CMC. You can find them by following the link to ‘Revision Kit Live’ from the main P4 page.)

  3. Dear Sirs,

    Referring to example 13 in this chapter,
    would like to know each contract is 拢62,500 (in pounds), but when we calculate the profit per ticks, we times 拢62,500 by 0.0001, the result is in dollar $6.25?

    Here we assume $/拢 is1:1?

    Please advise.

    Thanks,

    Candy

  8. Dear Sir,
    Thank you very much.
    I was confused a lot on this topic in the past. The lectures are really easy to follow and help us understand the topic of derivatives quickly.

  9. Hi Sir,

    At the end of the lecture it state that future is only suitable for large amount hedging, since there is no point gambling 62,500 pound which is larger than the hedge. I was wondering the contract currency of 62,500 pound is it the deposit to make a deal in futures?

    • Dealing in a future of 62,500 means you are at risk on 62,500. The object is to ‘cancel out’ the risk on the transaction itself. So if the transaction was (say) only 5,000 then dealing in a future would be increasing the amount at risk!

      The deposit/margin doesn’t itself affect the risk at all. The amount required is up to the dealer to decide, but is likely to be around 30%.

  10. Hi John

    After your examples and work through i got a confident, that was until i attempted to do Q2 of June 2011, the whole exchange rates got me confused again. Any comment/tricks on this particular questions, how i should go about it in the exam, if presented in such a way like this

  12. Very Nice.Lecture. God bless me. Kindly explain if we are given 2 futures rates ( as was given in recent exam)

    Open Rate
    Settlement Date

    You told us to take Open Rate for buying future and Settlement Date for selling future. Have I understood it correctly ! Kindly comment.

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