Alternative Underlyings

Contracts defined by what they reference rather than by their payoff — perpetuals and basis, freight, power, catastrophe risk and longevity.

6 products, each with a five-step lesson, a worked example and a bank of twelve questions.

Alternative Underlyings is part of the OTC Learn subscription; the 36 products the app shipped with are free.

• Perpetual Swap — A future with no expiry, held to spot by a payment
• Cash and Carry Basis — Buy the asset, sell the future, collect the difference
• Freight Forward Agreement — Hedging the cost of moving cargo, not the cargo
• Power Derivatives — A commodity that cannot be stored, priced by the hour
• Catastrophe Bond — A coupon that stops if the hurricane arrives
• Longevity Swap — Insuring against people living longer than planned

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