This effort to understand underlying instruments
is a direct result of the failure of several more esoteric financial instruments that were once thought to be safe, reliable vehicles for investment, such as auction-rate securities.
Managers see details for all portfolios in a single view and can drill down to see details about underlying instruments
, or up to view aggregated data across different metrics.
Like spread betting, CFD trading essentially allows you to trade on a huge range of markets without ever owning the underlying instruments
Market risk would be assessed on a portfolio basis, taking into account the cash flows associated with both derivatives and the underlying instruments
For newcomers to the field, a derivatives instrument is a bilateral contract or payments-exchange agreement whose value is measured by the value of one or more underlying instruments
, reference points or markets.
Each factor model aims to achieve similar market exposures using comparable but different underlying instruments
Closed-End Fund Investment Risk - Investing in closed-end investment companies involves substantially the same risks as investing directly in the underlying instruments
, but the total return on such investments at the investment company level may be reduced by the operating expenses and fees of such closed-end investment companies, including advisory fees.
In light of the strong linkages among the markets for futures, options, and their underlying instruments
, some have argued that the division of oversight responsibilities among agencies may impede the effective regulation and supervision that is essential to ensure sound and efficient financial markets.
Legg Mason has provided $83 million to collateralize the swap, which may be increased or decreased based on changes in the market value of the underlying instruments
or upon any maturity of, or default under, any of the underlying instruments
Further, the Fund may use derivatives, which involve risks that can differ from or exceed those of the underlying instruments
, including correlation risk, liquidity risk, valuation risk, the risk of unlimited losses, counterparty risk and operational risk.