THE INFLUENCE OF DERIVATIVES PRICING AND VALUATION RATIO IN THE CONTEXT OF MANAGEMENT DECISION-MAKING: PRACTICAL AND THEORETICAL ASPECTS

Павел ПАНЬКОВ Полоцкий государственный университет, Республика Беларусь

Abstract

The concepts and procedure for determining the price and value of derivatives are considered, and their relationship to each other in the context of managerial decision-making is disclosed. Conditional examples are used to calculate the price and value of derivatives that were used as hedging instruments. In the first case, the calculation for the forward contract for the silver purchase is considered, in the second case, calculation for the combination of futures to buy oil and foreign exchange forward was presented. As a result, the peculiarities of the process of determining the price and value of derivatives, the impact of revaluation results on the company's profit were determined, and the differences in the valuation of exchange-traded and OTC instruments were analysed. Based on the analysis, recommendations were given on the use of the concepts of notional and market (fair) value in the process of making managerial decisions in relation to derivatives. In particular, it is recommended to make a clear distinction between hedging operations and speculative operations, and it is also proposed to conduct a daily re-evaluation of the fair value of OTC derivatives based on similar quotes published in the Bloomberg and Reuters information systems, or on the basis of theoretical models. In the case of hedging risks using derivative instruments, it is recommended to plan and control hedging transactions based on the notional value: the nominal values of hedging instruments and the volume of hedged cash flows should not have significant deviations. Keywords: derivatives, management, price, value, futures, forward, hedging.