Global Derivatives Markets

Peijie Wang ()
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Peijie Wang: University of Hull, Business School

Chapter 11 in The Economics of Foreign Exchange and Global Finance, 2009, pp 1-30 from Springer

Abstract: Before the proliferation of financial derivatives, foreign exchange forwards might be the only derivative instrument active in the foreign exchange market. The pair of the spot foreign exchange and the forward foreign exchange has established or led to some fundamental, significant and seemingly straightforward doctrines, such as covered interest rate parity (CIRP). Over the decade, however, various financial derivative instruments have emerged and been transacted in the foreign exchange markets in enormous volumes. In contrast to foreign exchange forwards, the working of these newly emerged derivatives seem to be technical, trivial, and on the face of it, sophisticated. The widespread use of derivatives makes the market more complete and competitive on the one hand, and creates vast and complicated new financial management tasks and techniques on the other hand.

Keywords: Interest Rate; Foreign Exchange; Future Contract; Notional Amount; Derivative Market (search for similar items in EconPapers)
Date: 2009
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DOI: 10.1007/978-3-642-00100-0_11

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