NZX Derivatives Adviser case studies
NZX Derivatives Adviser · Put your knowledge to work in context.
The NZX Derivatives Adviser credential is a New Zealand market qualification for people who advise retail or wholesale clients on exchange-traded derivatives, or who supervise or oversee that advice. It signals that the holder understands how futures and options work mechanically, how they are margined and cleared through a central counterparty, how they are priced off the underlying, and - critically - what conduct and disclosure obligations attach to recommending them. The NZX Derivatives Adviser case studies are 5 cases and about 3,114 words.
1The Retired Client and the Leveraged Currency Futures Recommendation
Margaret, 68, is a retired teacher with a 420,000 term-deposit portfolio, NZ Super of 1,850 a month and no derivatives experience. Her adviser, Ben, is an authorised body of an NZX derivatives participant.
647 words, about 3 min2The Cheese Maker's Hedge: WMP Futures Versus an OTC Milk-Fat Swap
A Waikato specialty cheese maker, Kaimai Creamery, expects to buy 480,000 kg of milk fat over the next six months. Its bank offers an OTC milk-fat swap at a fixed price of NZD 8.10/kg, with a break fee equal to 2.5% of remaining notional if cancelled.
665 words, about 3 min3The Margin Call That Was Treated as a Deposit
On Monday a client holds 12 equity index futures contracts, each with a contract value of NZD 125,000 (index 6,250 x NZD 20 multiplier). Initial margin is NZD 8,000 per contract and maintenance margin is NZD 6,500 per contract; the client has NZD 96,000 in the futures account.
602 words, about 3 min4The Index Futures Mispricing and the Costly Arbitrage
An NZX 20 Index futures contract is priced at 6,360 with 90 days to expiry. The index is 6,250, the 90-day risk-free rate is 5.10% per annum with continuous compounding, the dividend yield is 3.20% per annum, and the contract multiplier is NZD 20.
628 words, about 3 min5The Client Order, the Proprietary Desk and the 40-Lot Head Start
A senior adviser at an NZX derivatives participant receives a client instruction at 10:05am to buy 150 NZX dairy futures contracts (WMP) over the day. The market's average daily volume is 220 contracts.
572 words, about 3 min