Futures, Options and Swaps

Royce Equity Management is a premier provider of global market access and liquidity for Futures, Options and Swaps. We deliver superior execution, clearing, and settlement on more than 70 exchanges worldwide.

There are three major classes of common Derivative Contracts

1. Futures/Forwards are contracts to buy or sell an asset on or before a future date at a price specified today. A futures contract differs from a forward contract in that the futures contract is a standardized contract written by a clearing house that operates an exchange where the contract can be bought and sold, whereas a forward contract is a non-standardized contract written by the parties themselves.

2. Options are contracts that give the owner the right, but not the obligation, to buy (in the case of a call option) or sell (in the case of a put option) an asset. The price at which the sale takes place is known as the strike price, and is specified at the time the parties enter into the option. The option contract also specifies a maturity date. In the case of a European option, the owner has the right to require the sale to take place on (but not before) the maturity date; in the case of an American option, the owner can require the sale to take place at any time up to the maturity date. If the owner of the contract exercises this right, the counter-party has the obligation to carry out the transaction.

3. Swaps are contracts to exchange cash (flows) on or before a specified future date based on the underlying value of currencies/exchange rates, bonds/interest rates, commodities, stocks or other assets.

For current information on the subject consult


FOW: The Global Derivatives Magazine

http://www.fow.com/ FOW is essential reading for all those involved in the global derivatives and risk management industry. Since its launch in 1982, FOW has been at the heart of the futures and options business. Subscribers to FOW benefit from timely commentary:

"Clearing houses: On the brink of radical change", David Wigan, FOW

01 February 2011

"For decades clearing houses have provided a stable, safe service to the futures and options market. Now, the contours of the market are about to change. Large tracts of the over the counter market may be opened up for clearing, leading to a land grab by existing players and new entrants. As competition intensifies, the big clearing houses face as many risks as opportunities. And, as David Wigan discovers, the next two years of upheaval and debate could bring the market closer to a transparent and accurate calculation of the costs and benefits of clearing.

If opacity and counterparty risk were the two birds that flew in the credit crisis, central clearing may be the single stone that brings them down to earth.

Or so the regulators hope.

Leveraged positions in privately negotiated, over-the-counter derivatives were one of the most damaging faultiness in the credit crisis, and led to bailouts of institutions such as AIG and Citigroup. To avert a repeat, regulators have ordained that as much as possible of the market must in future be transacted in the light of public scrutiny.

In September 2009 the G20 group of countries called for "all standardized derivative contracts to be cleared through central counterparties by end 2012 at the latest". Policy makers were quick to act and the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into US law in July."


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Royce Equity Management. unites broad market experience with sophisticated technology to provide clients with seamless execution and processing of transactions in a host of instruments focused on commodities, equities, currencies, metals and the movement of interest rates.

Research, Commentary and our latest Market Intelligence: Stay ahead with our futures, options and swaps experts' unique insights into key markets as we provide our clients with objective research and commentary

Our global network provides the execution and clearing expertise needed to manage risks and exposures using a broad array of derivative products. We work closely with our clients in every phase of the process, from research and analysis, to execution and clearing. Our clients range from industrial and agricultural corporations, leading banks and insurance companies to hedge funds and market makers.

You can access our Royce Futures, Options and Swaps Department dedicated page by clicking on this link.



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