Australia pushes for a COVID-19 inquiry – what does this mean for the ASX?

The tensions between Australia and China are intensifying. The Australian government is pushing for an independent investigation into the origins of COVID-19. In retaliation, China accused Australia of parroting the United States in advocating an inquiry. The Chinese Ambassador, Cheng Jingye, warned Australia that Chinese consumers might  boycott Australian goods and services if they pursue the investigation.… Read more

IMF forecasts 2020 to be worse than the GFC – is the false recovery over?

COVID-19 is taking away our loved ones, radically changing life as we know it, and causing the global economy to come to a standstill. The catastrophic economic repercussions of COVID-19 caused The International Monetary Fund (IMF) to release a revised economic outlook for 2020.

The IMF forecast the global economy will fall by 3% (April), which is much worse than the GFC.… Read more

Breaking down the fundamentals of financial derivatives

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

What is a Derivative Security?

A Derivative Security is a financial instrument whose value depends on the underlying asset.

Examples of Derivative Securities are:

  • Futures
  • Forwards
  • Options
  • Swaps

Examples of Underlying Assets are:

  • Financial Securities
    • Stocks
    • Bonds
    • Currencies
    • Stock indices
  • Commodities
    • Metals (copper, gold, silver)
    • Agricultural (corn, cotton, orange juice, coffee, cattle)
    • Wood
  • Energy
    • Oil products, natural gas
    • Electricity

Futures:

A Futures Contract is an agreement between a buyer (long position) and a seller (short position), to buy or sell the underlying asset at a certain time in the future (which is the maturity date), with a predetermined price.… Read more