Using the Futures Market
An Interactive Learning CDRom from Keystone Marketing Services

Instructional time 4-6 hours; multimedia time: 47 minute

This course looks at the practical uses of the futures market for producers and consumers. Although the perspective is not that of a speculator, this module will bring a rounded understanding of the "what" and "why" of futures markets to both speculators and hedgers.

Click here to view a sample "slide" from the CDRom

Outline, objectives & contents

• Chapter 1
  • Learning Objectives
    • To discuss the origins of commodity futures markets
    • To discuss the specifications for futures contracts
      
  • Contents
    • Managing Price Risk
    • Forward Cash Contracts
    • Start of Commodity Exchanges
    • Contract Specifications
    • Summary
    • Quiz
      
      
• Chapter 2
  • Learning Objectives
    • To explore the concepts of hedging
    • To demonstrate the three steps in hedging
  • Contents
    • Definition of Hedging
    • Futures vs. Forward Contracts
    • Establishing a Price Objective
    • Selecting a Futures Delivery Month
    • Local Expected Hedge Price
    • Short Hedging Using Hogs
    • Estimating Basis
    • Establishing a Hedge
    • Forecasting Basis Accurately
    • Summary
    • Quiz
      
      
• Chapter 3
• Learning Objectives
  • Discuss the impact of basis risk on hedging
  • To Discuss some of the criticisms of hedging
• Contents
  • Examining Basis Risk
  • Coping with Basis Risk
  • Impact of Increasing Cash Prices
  • Criticism of Hedging
  • Summary
  • Quiz
    
    
• Chapter 4
  • Learning Objectives
    • To illustrate how to use a hedge from a buyer's point of view
  • Contents
    • Long Hedging Using Corn
    • A Complete Hedge
    • To Hedge or Not to Hedge
    • Summary
    • Quiz
      
  
  
• Chapter 5
  • Learning Objectives
    • To examine the role of the speculator in the futures markets
  • Contents
    • Role of the Speculator
    • Speculators Assume Price Risk
    • Summary
    • Quiz
      
      
• Chapter 6
  • Learning Objectives
    • Discuss the role of trading range in the futures markets
    • To discuss the mechanics of margins in futures trading
    • To discuss the importance of financing in heading
  • Contents
    • Trading Ranges
    • Margins
    • Financing a Hedge
      
      
• Conclusion
  • Summary
  • Quiz
  • Conclusion