futures contract
Standardized forward obligation
A futures contract is a binding agreement to buy or sell a specific asset at a predetermined price on a future date.
Unlike options, futures contracts obligate both parties to complete the transaction.
They're used to hedge against price fluctuations in commodities, currencies, or financial instruments, or to speculate on price movements: She traded futures contracts on crude oil.
The standardized contracts trade on exchanges, distinguishing them from individually negotiated forward contracts.
Edge of a page
- settlementResolved dispute or colony
- expiryEnd of validity
- mark-to-marketValuing at current price
- volumeAmount of space filled
rollover · basis · lot · expiration date · cash settlement · standardized
Mutual giving and receiving
- clearinghouseCentral settlement agency
- liquidityConvertibility to cash
- CBOTChicago commodities marketplace
- ICEImmigration enforcement bureau
trading pit · electronic trading · broker · floor trader · bid · ask · spread · order book
Unrefined fossil fuel
- natural gasSubterranean hydrocarbon fuel
- goldElement seventy-nine
- silverLustrous white precious metal
- copperReddish-brown metallic element
corn · wheat · soybeans · cotton · coffee · cocoa · sugar · lumber
One wagering on outcomes
- leverageBorrowed capital for amplified returns
- day-tradingTrading within one session
- bullishExpecting market gains
- bearishExpecting market decline
momentum · volatility · risk-taking · long position · short position · scalping · swing trading · technical analysis
Identifying and minimizing threats
- price protectionRefund for subsequent markdowns
- interest rate riskPotential loss from yield changes
- swapExchange one for another
- price fluctuationsChanges in cost levels
airlines · exporters · importers · manufacturers · counterparty · exposure · harvest · inventory management
margin
Edge of a page
- settlementResolved dispute or colony
- expiryEnd of validity
- mark-to-marketValuing at current price
volume · rollover · basis · lot · expiration date · cash settlement · standardized
exchange
Mutual giving and receiving
- clearinghouseCentral settlement agency
- liquidityConvertibility to cash
- CBOTChicago commodities marketplace
ICE · trading pit · electronic trading · broker · floor trader · bid · ask · spread · order book · limit order
crude oil
Unrefined fossil fuel
- natural gasSubterranean hydrocarbon fuel
- goldElement seventy-nine
- silverLustrous white precious metal
copper · corn · wheat · soybeans · cotton · coffee · cocoa · sugar · lumber · platinum
speculator
One wagering on outcomes
- leverageBorrowed capital for amplified returns
- day-tradingTrading within one session
- bullishExpecting market gains
bearish · momentum · volatility · risk-taking · long position · short position · scalping · swing trading · technical analysis · price prediction
risk management
Identifying and minimizing threats
- price protectionRefund for subsequent markdowns
- interest rate riskPotential loss from yield changes
- swapExchange one for another
price fluctuations · airlines · exporters · importers · manufacturers · counterparty · exposure · harvest · inventory management · procurement
futures contractcall option
Right to buy at set price
put option · option · warrant · right
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