Definition Futures Contract. Description.
A Futures Contract is a standardized legally binding
agreement, traded on a futures exchange, which requires the delivery of a
commodity, currency, or financial instrument at a specified date in the future,
at a set price specified on the last trading date. Futures contracts are standardized
according to the quality, quantity and delivery time and location for each
commodity. The only variable is price.
A futures contract gives the holder the right and the obligation
to buy or sell. Contrast this with an options contract, which gives the buyer
the right, but not the obligation, and the writer (seller) the obligation,
but not the right. In other words, an option buyer can choose not to exercise
when it would be uneconomical for him. The holder of a futures contract and
the writer of an option, do not have a choice. To exit the commitment, the
holder of a futures position has to sell his long position or buy back his
short position, effectively closing the position.
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Introduction and Summary of Futures and Stop Loss Contracts
Initial understanding of Futures and Stop Loss Contracts...
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News about Futures Contracts
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Videos about Futures Contracts
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Presentations about Futures Contracts
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Books about Futures Contracts
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More about Futures Contracts
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Compare with:
American-Style Option
| European-Style Option
| Call Option |
Put Option |
Asian Option |
Hedge
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Special Interest Group Leader
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