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A contract which represents the obligation to buy or sell at a specified date in the future is known as?
Wiki User
∙ 12y ago
option
Wiki User
∙ 12y ago
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Why are commodity futures contracts transferable?
Commodity future contracts are transferable (can be bought and sold), to realize a profit or loss, but the obligation in the contract remains valid.
Why are commidity future contracts transferable?
They can be bought and sold but the obligation in the contract remains valid.
What are the selling stock options?
Stock options are a contract specifying a contract for a future purchase between two parties. The buyer has the option to buy at a future date and the seller, the obligation.
What have investors agreed to when they sign a contract guaranteeing them the option of selling shares of stocks at a specified price in the future?
spot option
What is stock future?
A futures contract is an obligation to buy a stock at a certain price on a certain date, unlike and option, where there is no obligation to buy, only the right to buy. Check out this website, it might help you get started.
Why are futures and options risky investments?
Futures and options are no more risky than equities, bonds, or foreign exchange trades. Futures are a standardized contract between two parties to buy or sell a specified asset at its current price at a specific date in the future. An option is the same thing, but without the obligation to buy.
What is a forward contract?
A customized contract between two parties to buy or sell an asset at a specified price on a future date. A forward contract can be used for hedging or speculation, although its non-standardized nature makes it particularly apt for hedging.
What are strike price call put when it is comes to stock options?
From Investopedia.com:What Does Strike Price Mean? The price at which a specific derivative contract can be exercised. Strike prices is mostly used to describe stock and index options, in which strike prices are fixed in the contract. For call options, the strike price is where the security can be bought (up to the expiration date), while for put options the strike price is the price at which shares can be sold.The difference between the underlying security's current market price and the option's strike price represents the amount of profit per share gained upon the exercise or the sale of the option. This is true for options that are in the money; the maximum amount that can be lost is the premium paid.Also known as the "exercise price".What Does Call Mean?1. The period of time between the opening and closing of some future markets wherein the prices are established through an auction process.2. An option contract giving the owner the right (but not the obligation) to buy a specified amount of an underlying security at a specified price within a specified time.What Does Put Mean? An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time. The buyer of a put option estimates that the underlying asset will drop below the exercise price before the expiration date.
What is types of derivatives?
The common derivatives in the market are futures contracts, options and swaps. A futures contract is a contract between two or more parties to trade a certain asset at a specified date in the future at the price agreed on today. Swaps are contracts to exchange cash on or before a certain future date. Cash is exchanged based on the underlying value of commodities, stocks, exchange rates or other such assets Options give the owner the right but not the obligation to buy or sell an asset. The sale takes place at a certain price called the strike price. This price is specified when the parties enter into the contract. This contract will also specify a maturity date. There are five major classes of underlying assets. These are interest rate derivatives, foreign exchange derivatives, credit, equity and commodity derivatives.
What is a derivatives future?
future is a commitment to receive or deliver a specified quantity and quality of a commodity by a specified future date. A future can be used to insure a transaction price at a date prior to the actual exchange.
What is the future value of your money?
the amount of money you will have at a specified date in the future
