Free module · Foundations
Trading Different Assets: Instruments, Mechanics & Risk
Understand what you own, how a trade settles, and which quantities belong in your model.
Stocks · ETFs · bonds · futures · commodities · FX · options · crypto · perpetuals · event contracts
The building blocks
Choose what economic exposure you want, then identify the exact instrument that provides it. Owning a share, posting futures collateral and paying an option premium create different rights and obligations.
- Read the asset and contract specification
- Trace cash flows, financing and settlement
- Adapt data, execution and risk assumptions
Lessons in this module
- Start with the instrument: exposure, ownership and obligations
- Stocks and ETFs: shares, dividends, shorting and fund structure
- Bonds and bills: lending, accrued interest and settlement cash
- Futures: multipliers, ticks, margin and expiry
- Commodities: spot goods, storage and the futures curve
- Foreign exchange: two currencies, one quote and financing
- Options: rights, premiums, exercise and nonlinear exposure
- Spot crypto: tokens, venues, wallets and execution
- Crypto perpetuals: funding, mark prices and liquidation
- Event contracts: resolution rules and probability-priced exposure
Practice and apply
- Reference notional — Two contracts control 50 units each at $100 per unit. Find notional.
- Share cash ledger — Ten shares enter at $50, exit at $53, distribute $.50 each and incur $2 costs. Find profit.
- Bond settlement — Face $10,000, clean quote 98.5, 6% coupon, 30/360 accrual, $5 costs. Find settlement cash.
- Contract P&L — Two long contracts, $50/point, 3-point gain, $8 total costs. Find profit.
- New contract ledger — Buy one new contract at 102, exit it at 100, multiplier $10/point, ignore costs. Find P&L.
- FX quote-currency P&L — Long 10,000 EUR from 1.1000 to 1.1050 USD/EUR, costs $4. Find P&L in USD.
- Long call at expiry — One call: M=100, strike 50, premium 3, settlement 55, total costs $2. Find profit.
- Spot ledger — Buy .2 units at 50,000 and sell at 51,000. Trading costs 12, transfer costs 5, all in quote currency. Find net.
- Perpetual ledger — Long .1 units from 50,000 to 50,500; funding reference 50,000, rate .001, fees 4. Find net profit.
- Settlement profit — 20 Yes contracts at $.60 with $.01 costs each pay $1 when Yes resolves. Find profit.
Work through the practice exercises · Quant development tools