Forward and Futures Markets in Financial Markets - Lecture 15

Explore the intricacies of forward and futures markets in this comprehensive 1-hour 13-minute lecture from Yale University's Financial Markets course. Delve into the distinctions between forwards and futures, and understand how futures markets are used to predict prices of commodities and financial assets. Examine the impact of speculation on capitalist activity and learn about key concepts such as counterparty risk, contract standardization, and clearinghouses through the lens of the first futures market in Dojima, Japan. Investigate price patterns like contango and backwardation in wheat futures, and understand the role of margin accounts in mitigating risks. Trace the evolution of the oil market from the 1870s through major crises, culminating in the 2008 price spike. Conclude with an exploration of financial futures, focusing on S&P 500 index futures and the differences between physical delivery and cash settlement. This lecture offers a comprehensive overview of futures markets, their historical development, and their significance in modern finance.

- Chapter 1. Forwards vs. Futures Contracts; Speculation in Derivative Markets.
- Chapter 2. The First Futures Market and the Role of Standardization .
- Chapter 3. Rice Futures and Contango vs. Backwardation.
- Chapter 4. Counterparty Risk and Margin Accounts.
- Chapter 5. Wheat Futures and the Fair Value Formula for Futures Pricing.
- Chapter 6. Oil Futures .
- Chapter 7. The History of the Oil Market .
- Chapter 8. Financial Futures and the Difficulty of Forecasting.