Beyond Stocks and Bonds: Learning about Futures, Options,

Derivatives, and More

BRASS Program at the ALA Annual Conference
June 27, 2005
Chicago, Illinois

Discovering Information Resources for Commodities and

Futures
Rita W. Moss
Davis Library, University of North Carolina at Chapel Hill

*************Derivatives*************

The most common types of derivatives that ordinary investors are likely to come across
are futures, options, warrants and convertible bonds. But the real range of derivatives is
only limited by the imagination of investment bankers.

Types of Derivatives Include

• forwards and futures

• swaps
• exchange-traded calls and puts
• explicit corporate options
• corporate debt securities
• government securities
• mortgages and insurance
• securities of other financial institutions
• exotic options
• other financial options
• natural resources
• capital assets
• other non-financial options
General Resources

Encyclopedia of Business. Jane A. Malonis, editor ; foreword by Martin S. Fridson. 2nd

ed. Detroit: Gale Group, c2000. 2vs
A fairly comprehensive reference book. It provides practical and readable definitions that
cover a broad range of topics. Derivatives, futures and options are included in the
descriptions

Encyclopedia of Business and Finance. New York: Macmillan Reference USA, c2001.
2vs.
Very accessible and designed for the non specialist there is a concise description that
includes basic types of derivative instruments and risk characteristics.

International Encyclopedia of Business and Management. Malcolm Warner, editor.

2nd ed. London : Thomson Learning, 2002. 8vs.
Contains more than 500 entries on management topics including finance. The section on
Derivatives concentrates on hedging.

Hull, John C. Options, Futures & Other Derivatives. 5th ed. Upper Saddle River, NJ:
Prentice Hall, c2003.
Comprehensive coverage and clear explanations of difficult material. nonessential math,
this text bridges the gap between the theory and practice of derivatives. Often used as a
text book.

An Introduction to Derivatives. Singapore: New York: John Wiley,1999.

Describes fundamental risk management tools and presents their application in trading,
hedging and arbitraging. A basic primer designed for general audiences with a heavy use
of charts and other graphics. This book has a “friendly” layout that makes it especially
easy to follow.

Dictionaries/Glossaries

Most financial dictionaries contain at least some of the vocabulary of derivatives,

but the following publication contains most of the specialized jargon as well as being a
guide to the instruments in use. It provides more information than most typical
dictionaries. Definitions also include diagrams.

Inglis-Taylor, Andrew. Dictionary of Derivatives. Basingstoke, England: Macmillan,

1995.

For those who do not have a specialized print dictionary the following Web page is
extremely useful.
Derivatives Dictionary. The William Margrabe Group, Inc. Copyright © 1996–2002.
Last revised: 03/02/02. http://www.margrabe.com/Dictionary.html (Accessed June 18,
2005).
Web Sources/Free Statistics

Appliederivatives
erivatives.com (http://erivatives.com/)
A series of free monthly magazines, about all aspects of trading and using futures,
options, swaps and other derivatives around the world.

Derivatives Portal
http://www.derivativesportal.org/
“The portal contains short descriptions and links to the most frequently read articles,
books, journals, papers, newspapers/magazines and websites covering all types of
derivatives and their applications.”

ISDA (International Swaps and Derivatives Association)

http://www.isda.org/
The global trade association for participants in the derivatives industry.
For librarians the interesting section may well be the Surveys & Market Statistics. This
section includes: Margin Surveys from 2001-; Operations Benchmarking Surveys from
2000-; Summaries of Market Survey Results from 1995-; and Market Survey Historical
Data 1987-.

Financial Policy Forum (Derivatives Study Center)

Derivatives Data http://www.financialpolicy.org/dscdata.htm
The Derivatives Study Center has put together spreadsheets with data from the Bank for
International Settlements (BIS) and the U.S. Treasury's Office of Comptroller of the
Currency (OCC).

Bank for International Settlements

http://www.bis.org/statistics/derstats.htm
This section covers time series on BIS over-the-counter and exchange-traded derivatives
statistics. Data is downloadable in csv format or in pdf. Includes OTC foreign exchange
derivatives, single currency interest rates derivatives and equity linked and commodities
derivatives.

Office of the Comptroller of the Currency

http://www.occ.treas.gov/deriv/deriv.htm
For those interested only in derivatives at banking organizations in the United States, the
Office of the Comptroller of the Currency compiles a quarterly OCC Bank Derivatives
Report based on information submitted in regulatory reports. The Reports are available
from the 4th quarter of 1995.
 ****Futures****
Contracts covering the purchase and sale of financial instruments or physical
commodities for future delivery. These orders are transacted on a commodity futures
exchange.

Commodity Futures

General Commodities Information

The U.S. Department of Agriculture has always been a major supplier of data on
agricultural commodities.

Chicago Board of Trade. Commodity Trading Manual. Chicago: The Board, 1999.
The Commodity Trading Manual includes chapters on the history and development of
commodities trading, basic operations and trading strategies, and federal and exchange
regulations.

Outlook Reports. Economic Research Service, USDA.

http://www.ers.usda.gov/publications/outlook/
(accessed June 17, 2005

U.S. Dept. of the Interior. U.S. Geological Survey. Minerals Yearbook. Washington,
D.C.: Government Printing Office, 1932/33-. 3v. Annual.
Web version http://minerals.usgs.gov/minerals/pubs/commodity/myb/
(Accessed June 17, 2005)
Contains information on approximately 90 metals and minerals, mining and quarrying
trends and an annual review of mineral production and trade, and of mineral related
government and industry developments in more than 175 foreign countries.

Mineral Industry Surveys. U.S. Dept. of the Interior. U.S. Geological Survey.
http://minerals.usgs.gov/minerals/pubs/commodity/mis.html
(Accessed June 17, 2005)
Periodic on-line statistical and economic publications designed to provide timely
statistical data on production, distribution, stocks, and consumption of significant mineral
commodities. These publications are issued monthly, quarterly, or annually.

Other sources of general and specialized commodities statistics can be found in the
American Statistics Index, Encyclopedia of Business Information Sources, Statistical
Reference Index, LexisNexis Statistics and Statistics Sources.

Journal of Commerce. New York, NY : Journal of Commerce, Inc 1927-.

(Online access at http://www.joc.com
Provides the most comprehensive newspaper coverage of commodities. The daily price
tables it includes for both futures and cash markets list more commodities than
comparable tables in other newspapers, with data on foreign markets, London metals,
Tokyo gold, Singapore rubber, and Sydney steer, among others, as well as domestic
markets. It also includes articles on individual commodities, reviews of past trading, and
projections for the future

Consensus. Kansas City, Mo.: Consensus, 1971-. Weekly.

Consensus focuses on commodities. Each weekly issue includes digests of current market
letters, special studies, buy and sell recommendations issued by major brokerage firms,
daily price quotations, and detailed price charts. There is a subscription Web version of
this publication with daily updates. From the site at http://www.consensus-inc.com one
can view a sample issue of the publication and also check on some of the other services
offer

Regulation

Commodity Futures Trading Commission

Futures trading is regulated by the Commodity Futures Trading Commission (CFTC)

(http://www.cftc.gov/cftc/cftchome.htm) an independent federal regulatory
commission established by Congress in 1974. The mission of the CFTC is to:
“regulate commodity futures and option markets in the United States.
The agency protects market participants against manipulation, abusive
trade practices and fraud.”
The site includes links to laws and regulations, disciplinary action,
enforcement actions and consumer advisories.
Exchanges Designated by the CFTC as Contract Markets

FE (CBOE Futures Exchange) http://www.cboe.com/

Chicago Board of Trade
Chicago Climate Futures Exchange
Chicago Mercantile Exchange
HedgeStreet
INET Futures Exchange
Kansas City Board of Trade
Minneapolis Grain Exchange
NQLX
New York Mercantile Exchange
New York Board of Trade
OneChicago
Philadelphia Board of Trade (PBOT) http://www.phlx.com/pbot/index.html
USFE (Eurex US)
http://www.cbot.com/
http://www.chicagoclimatex.com/ccfe.html
http://www.cme.com/
http://www.hedgestreet.com/
http://www.island.com/
http://www.kcbt.com/
http://www.mgex.com
http://www.nymex.com/jsp/index.jsp
http://www.nybot.com/
http://www.onechicago.com/
http://www.eurexus.com/index.html

Directory of Futures and Options Exchanges. Numa Financial Systems

http://www.numa.com/ref/exchange.htm
(Accessed June 18, 2005)
Provided by Numa this site lists over 100 exchanges. The latest to be added is the
Palestine Securities Exchange.
Financial Futures

Financial futures trading began in the 1970s with the trading of futures contracts on
selected foreign currencies and fixed income securities, such as Treasury bills. Since
then, the diversity of products and trading volume has expanded considerably.

General Resources

Bernstein, Jake. How the Futures Markets Work. 2nd ed. New York: new York Institute
of Finance, 2000. 328p.
Intended for beginners this book serves as a good introduction to the subject. Areas
covered include the basic concepts of trading, hedging and analysis and it also contains a
description of how an exchange works and how a trading floor is organized.

CBOT Publications
http://cbot.com/cbot/pub/page1/1,3248,1060,00.html
(Accessed June 17, 2005)
Or go to cbot.com and click on Education and then Publications.
There also three tutorials at http://cbot.com/cbot/pub/page/0,3181,492,00.html
These cover Agriculture, Agricultural Options and the Dow.

Handbook of World Stock, Derivative and Commodity Exchanges. Welwyn Garden

City, UK: Mondo Visione. Annual.
Previously known as both the Bridge Handbook of World Stock, Derivative &
Commodity Exchanges and the MSCI Handbook of World Stock, Derivative &
Commodity Exchanges and the Compaq Handbook of World Stock, Derivative and
Commodity Exchanges. Its strength lies in its brief descriptions, which provide
information for about 250 exchanges. Also included are the main indexes, aggregate
trading data and articles from industry figures.

Futures. Chicago: Futures Magazine Inc, 1972-. Monthly.

(Online subscription and some free information is available at
http://www.futuresmag.com/ )
Some free articles are included and a very useful Futures Classroom.
ABI/Inform has the full text from 1997!

SourceBook: Commodity and Financial Services International Directory. Chicago:

Futures Magazine Inc. Annual
Contains the names and addresses of the major U.S. and non U.S. brokerage, charting,
computer, and advisory services, as well as publishers, consultants and a complete list of
worldwide industry regulators complete with contact information
Also online at http://futuresmag.com/sourcebook/sourcebook.html
(Accessed June 18, 2005)
Journal of Futures Markets. New York, N.Y.: Published by J. Wiley in affiliation with
the Center for the Study of Futures Markets, Columbia University, c1981-
Chronicles, through articles, the latest developments in financial futures and derivatives.
“Coverage ranges from the highly practical to theoretical topics that include futures,
derivatives, risk management and control, financial engineering, new financial
instruments, hedging strategies, analysis of trading systems, legal, accounting, and
regulatory issues, and portfolio optimization.”
Contained in ABI/Inform (1 year embargo) and Wiley Electronic Journals (current).

****Options****
Options give their holders the right (but not the obligation) to buy or sell a specified
amount of an underlying security (stock, bond, futures contract, etc.) at a specified price
within a specified time.

Free options quotes, delayed by 20 minutes, are generally available at all exchanges and a
good place to start is the Chicago Board Options Exchange Web page.

Chicago Board Options Exchange

http://www.cboe.com/delayedQuote/QuoteTable.aspx
Free options quotes, delayed by 20 minutes.

Decisions to purchase and trade in options are based primarily on the investor's opinion
of the underlying stocks so all available company resources are major resources.

General glossaries and dictionaries are available on the Web:

Two examples are:

Futures & Options Glossary

http://www.duke.edu/~charvey/Classes/glossary/g_index.htm
prepared by Campbell R. Harvey, J. Paul Sticht Professor of International Business,
Fuqua School of Business, Duke University.

Glossary http://www.riskglossary.com/
prepared by Glyn Holtman, an independent consultant in financial risk management.

One advisory service which may be available in many libraries is supplied by

Value Line.

Value Line Options. New York: Value Line, Inc., v. 12, no. 27, 1981-. Weekly.
Value Line Options is a weekly that ranks options performance and evaluates risk levels
for both writers and buyers of puts and calls.
*****Statistics*****

Statistics on commodities, futures and options are generally available from of all of the
exchanges and from some of the time series listed above.
There are many companies that sell data sets or perform data analysis but the following
resources can be found in many libraries.

CRB Commodity Yearbook. New York; Chichester: Wiley, 1939-. Annual. Quarterly
supplements.
An important source of current and retrospective statistical data. Provides detailed
statistical data on over 100 commodities, ranging from alcohol to zinc. Coverage for each
basic commodity generally includes a review of the past year's supply and demand and
the conditions affecting both, a list of the exchanges on which the commodity is traded in
the United States, and several tables on world production, domestic price support
programs, domestic price supply, distribution, production, prices, exports, volume of
trading, and other statistics. Most tables give information for at least 10 years, and some
date back as far as 14 years. Included are interest rates and stock indexes futures.

(Thomson) Datastream. Boston, MA: Thomson Financial.

Is a respected historical financial numerical database covering financial instruments,
equity and fixed income securities, and indicators for over 175 countries and 60 markets
worldwide. One section of the database covers Financial & Commodity Futures and
Traded Options.

Datastream provides wide coverage of these futures markets.

• LIFFE London International Financial Futures Exchange

• LME London Metal Exchange
• CBOT Chicago Board of Trade
• MGE Minneapolis Grain Exchange

Traded Options data is available from the main markets, including the following:

• Deutsche Termin Borse (DTB)

• European Options Exchange (EOE)
• London International Financial Futures and Options Exchange (LIFFE)
• Paris Financial Futures Exchange (MATIF)
• Paris Traded Options Market (MONEP)
• Austrian Options and Financial Futures Exchange (OTOB)
• Swiss Options and Financial Futures Exchange (SOFFEX)
Berkley Options Database. Haas School of Business. University of California, Berkley.
http://www.haas.berkeley.edu/finance/opdata.htm
This source provided historical equities options (US) data.
“The Berkeley Options Data Base is a historical record of trades and quotes, time-
stamped to the nearest second, for all standardized contracts traded on the Chicago Board
Options Exchange, including S&P 500 index options. The data base, which is derived
from the CBOE's Market Data Retrieval tapes, begins in August, 1976 and is updated
annually. Data are currently available through December, 1996.

Unfortunately this service has been suspended because of the changing policies of
CBOE. Some universities have data from 1976-1995.