Exploring the Impact of COVID-19 on Financial Derivatives Markets

Abstract

Currently, financial derivatives are important financial instruments. Financial derivatives can provide investors with the opportunity to hedge, speculate, and arbitrage. But due to the impact of COVID-19. The performance of financial derivatives has changed dramatically compared to the pre-epidemic period. This dissertation focuses on the performance of three major financial derivatives which include futures, options, and credit under COVID-19. The phenotypes of these three major financial derivatives are analyzed separately. In this paper, we examine the extensive literature to demonstrate the changes in financial derivatives during COVID-19. By collecting a large amount of data about financial derivatives during the COVID-19 period and before. And the data are quantitatively analyzed to show the specific performance of financial derivatives under COVID-19. The study found that there is a huge variation in the performance of these three financial derivatives in COVID-19. For futures, foreign performance futures can bring a negative impact on financial markets. As for domestic, the performance is different during the emergency resistance period and the normalized resistance period. The performance of the emergency resistance period is significantly less than the normalized resistance period. For options, the volatile market sentiment and panic caused by recurring epidemics affect investors' judgment, which leads to changes in the implied volatility of options and affects the price of options. For swap specify its basic means of operation in an epidemic state and the basic types.