21. Forwards and Futures

Financial Markets (ECON 252)

Futures markets were started in Osaka, Japan in the 1600s to create an authoritative and meaningful market price for agricultural products, using standardized contracts. Since then, futures markets have been copied around the world to allow the hedging various future risks, financial and other. In the United States, the Chicago Mercantile Exchange and the Chicago Board of Trade have been the most popular futures trading markets. Although futures markets are changing and becoming more electronic, they are still important risk management tools for farmers and present financial opportunities for all manner of hedgers and arbitrageurs.

00:00 - Chapter 1. Introduction: Thoughts on Guest Speakers
07:23 - Chapter 2. From Osaka's Rice Warehouses: The Development of the Forward and Futures Market
24:47 - Chapter 3. Forward Contracts for Currency Exchange and Interest Rates
35:30 - Chapter 4. The Completely Financial Futures Market
51:44 - Chapter 5. A Case Study of Futures: The Price of Wheat and the Question of Storage
01:00:47 - Chapter 6. Backwardation and Spot Premiums

Complete course materials are available at the Open Yale Courses website: http://open.yale.edu/courses

This course was recorded in Spring 2008.