Fundamentals of Derivative Securities

Define forward and futures contracts, and distinguish between their key features.

Define European and American call and put options and their key parameters.

Draw and interpret payoff diagrams for basic derivative positions (long/short forwards, calls, puts).

Construct and interpret payoff diagrams for common option combinations (spreads, straddles, collars).

Calculate the no-arbitrage forward price for assets with and without income.

State and apply put-call parity for European options.

Explain the primary factors that influence option prices.