Introduction
Provide an educational introduction to Crypto Derivatives assuming the reader is unfamiliar with Crypto derivatives but has some knowledge on regular derivatives.
Basic questions to address include but are not limited to the following:
Crypto Derivatives (CDs)
• What types of Crypto Derivatives are available for transactions?
• Which cryptocurrencies have CDs? On what exchanges?
• What are smart derivative contracts?
Literature Review
Use Google Scholar, Google and other search tools to identify particularly helpful articles, books, journals and websites specifically on Crypto Derivatives that a reader can use for reference and further self-education. Look for important high quality educational material, not just casual wordy articles. Download relevant material and place it in a zip file for separate submission with this project assignment.
Bitcoin and Ether Futures:
Provide the following for Bitcoin/Ether futures
• How do crypto futures differ from standard futures in margining, settlement…? (Include contract specifications in an Appendix and not in the body of the Report.)
• How is the Fair Value price computed? What models are valid for pricing?
• Describe two or more typical applications but on a separate Excel spreadsheet develop numerical solutions clearly illustrating them. Separately include the Excel spreadsheet with your submission.
Bitcoin Options:
For Bitcoin Options repeat the steps taken with Bitcoin Futures answering how they differ from standard options and describe typical applications but with worked numerical details only in the Excel spreadsheet. Is a standard Black-Scholes model valid for pricing?
