futures contracts
Standardized delivery promises
Futures contracts are binding agreements to buy or sell an asset at a predetermined price on a specific future date.
Originally developed for agricultural commodities—allowing farmers to lock in prices before harvest—they now cover everything from oil to stock indexes to currencies.
Unlike options, futures obligate both parties to complete the transaction.
Traders use them to hedge against price swings or to speculate: She bought futures contracts on wheat expecting prices to rise.
End of validity
- settlementResolved dispute or colony
- marginEdge of a page
- mark-to-marketValuing at current price
- rolloverVehicle flipping accident
standardization · clearinghouse · counterparty · cash settlement
Borrowed capital for amplified returns
- long positionOwning an asset outright
- short positionSelling borrowed securities
- bullishExpecting market gains
- bearishExpecting market decline
day trading · swing trading · short selling · margin call · profit-taking · contrarian
Cultivation of land, livestock
- energyPower to do work
- metalsLustrous conductive elements
- grainsSmall hard seeds
- oilSlippery viscous fluid
gold · silver · copper · soybeans · wheat · corn · cattle · hogs
Mutual giving and receiving
- liquidityConvertibility to cash
- volumeAmount of space filled
- market orderInstant execution trade request
- limit orderPrice-specific buy/sell instruction
stop order · electronic trading · CBOT · ICE · floor trader · broker · execution · order book
Exploiting price discrepancies
- carry tradeBorrowing cheaply to invest higher
- convergenceProcess of approaching sameness
Identifying and minimizing threats
- price protectionRefund for subsequent markdowns
- lock-inEnforced continued commitment
- producerOne who makes things
- consumerOne who acquires goods
expiration
End of validity
- settlementResolved dispute or colony
- marginEdge of a page
- mark-to-marketValuing at current price
rollover · standardization · clearinghouse · counterparty · cash settlement
leverage
Borrowed capital for amplified returns
- long positionOwning an asset outright
- short positionSelling borrowed securities
- bullishExpecting market gains
bearish · day trading · swing trading · short selling · margin call · profit-taking · contrarian
agriculture
Cultivation of land, livestock
oil · gold · silver · copper · soybeans · wheat · corn · cattle · hogs · coffee
exchange
Mutual giving and receiving
- liquidityConvertibility to cash
- volumeAmount of space filled
- market orderInstant execution trade request
limit order · stop order · electronic trading · CBOT · ICE · floor trader · broker · execution · order book · trading hours
arbitrage
Exploiting price discrepancies
- carry tradeBorrowing cheaply to invest higher
- convergenceProcess of approaching sameness
risk management
Identifying and minimizing threats
- price protectionRefund for subsequent markdowns
- lock-inEnforced continued commitment
- producerOne who makes things
- contractsbinding contracts, lease, clause, oral, severance package
- commodities tradingcommodities, commodity markets, commodity prices, hedging, speculation
- Tulip Maniatulips, bulbs, speculation, bubble, mania
- derivativesderivatives, sequel, option, remake, spinoff
- Futures Tradinghedging, speculation, leverage, expiration, expiration dates
- risk contractsinsurance policies, life insurance, fire insurance, car insurance, home insurance
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