A futures contract is an agreement to buy or sell an asset on a listed stock exchange. The contract determines when the seller will deliver the asset and what the price will be. The underlying asset of a futures contract is usually a commodity, stock, loan or currency. Since futures contracts correspond to an underlying, they are an example of derivatives. Futures contracts are standardized, unlike futures contracts. Forwards are similar types of agreements that set a future price at the moment, but forwards are traded over-the-counter (OTC) and have customizable terms that are taken between counterparties. In contrast, futures contracts have the same terms, regardless of the counterparty. Performance Bond Margin The amount of money paid by both a buyer and a seller of a futures contract or a seller of options to guarantee the execution of the term of the contract. The margin in raw materials is not a payment of equity or down payment on the goods themselves, but a guarantee. The settlement is the act of conclusion of the contract and can be carried out in a way of two orders, as indicated depending on the type of futures contract: the specifications of the contract are identical for all participants. This ownership of futures contracts allows the buyer or seller to easily transfer contractual ownership to another party through an exchange. Given the standardization of contract specifications, the only contractual variable is price.
The price is determined by the offer and the offer, also known as the offer, until a match or trade takes place. Futures contracts look like futures, but there are some important differences that need to be understood. The easiest way to imagine the differences is that the futures contract is a more personalized form of futures contract. The delivery time and purchase price of a futures contract are tailored to the specific needs of both the buyer and seller. However, a front cardholder cannot pay until the settlement of the last day, which could be a significant credit; This can be reflected in the brand through risk prevention. Beyond the tiny effects of convexity distortion (due to the loss or payment of interest on the margin), futures and forwards, at equal delivery prices, result in the same total loss or profit, but futures holders experience this loss/profit in daily increments that follow the daily changes in the attacker`s prices, while the attacker`s spot price converges to the billing price. Thus, for both assets, the profit or loss is recorded during the holding period, while the mark-to-market accounting is recorded in marks-to-market; in the case of a futures contract, this profit or loss is realized on a daily basis, while in the case of a futures contract, the profit or loss is not realized before expiration. . .