Analysis of financial derivatives by mechanical method (I)—Basis equation of price of index futures

Abstract

Meaning and Methods of Studying of Financial DerivativesFinancial derivatives are those financial products which are derived from basic asserts (or underlying instrucments) (e.g. stock, bond, currency, interest rate, etc. ) of traditional markets (e.g. stock market, bond's market, currency market, etc.), such as futures (stock futures, index futures, interest rate futures, currency futures, etc. ), options (currency option, interest rate option, index option, etc. ) etc.In recent decades, financial derivatives are characterized by much creating, fast developing, large scaling, and wide and deep influencing. The total creating of financial products in recent decades is much more than the sum created in past 200 years[d; the scale and the speed of developing can be seen from the following data: the volume of future wading market increases