This 2-part series discusses the emergence of financial derivatives after the collapse of the Bretton Woods accord in 1971. In Part 1, the article explains the concepts that enabled financial derivatives markets to flourish, focusing on the required mathematical concepts. Part 2 continues with...

This paper provides an introduction to U.S. commodity futures markets, which is especially relevant for individuals in developing markets who are newly embracing market solutions to financial uncertainty. The paper specifically covers the following topics: (1) the beginning, transformation, and...

A number of empirical studies, mainly from academic researchers, have been crucial in the debate on the economic role of futures trading. This article briefly reviews these influential studies with a focus on agricultural futures contracts, financial futures contracts. and the transparency of data

In the Fall of 2011, futures market participants were caught off-guard when MF Global filed for bankruptcy. Essentially, this episode educated industry participants that customer protections in the U.S. commodity futures markets had been more ambiguous than expected. That said, there are a...

This article covers the trading blowups at the hedge fund, Amaranth, and at the Futures Commission Merchant, MF Global. Although the lessons from the Amaranth blowup can best be understood in terms of market-risk principles, the lessons from the MF Global bankruptcy are best understood in terms...

This collection of articles covers the commodity derivatives markets from a broadly conceptual perspective. Specifically, this set of articles reviews (a) the potentially persistent sources of return in the commodity futures markets; (b) the differing risk-management priorities for commercial...

This article reviews a class of trading strategies known as “weather fear premia” trades. It argues that these types of trades may comprise a type of risk premium and notes the extra diligence needed in their risk management. The article notes that both superior trade construction and an...

The history of futures regulations reveals four features in determining whether a futures contract can succeed: (a) a contract must have a convincing economic rationale; (b) it is helpful if contracts are viewed as being in the national interest; (c) competition requires regulatory parity among...

This article provides a brief introduction to risk premia strategies and notes how commodity risk premia strategies are an extension of ideas that were originally developed for the equity markets. The paper considers how to manage the risks of these strategies and discusses the importance of a...