Lesson 1, Topic 1
In Progress

Key Features:

  • Standard Contracts: Exchange-traded derivatives have standardized contracts with predefined specifications, making them easier to trade and compare.
  • Tick Sizes: Tick sizes refer to the minimum price movement allowed for a derivative contract. Tick sizes may vary depending on the exchange and the specific derivative being traded.
  • Margin Requirements: Both ETDs and OTC derivatives may have margin requirements, which are funds or collateral that participants must deposit to cover potential losses. Margin requirements can vary based on the contract and the parties involved.
  • Margin Trading: Margin trading allows market participants to trade derivatives by using leverage, meaning they can control larger positions with a smaller amount of capital. Margin trading amplifies both gains and losses.
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