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Stock Options and Futures

Are futures contracts long term contracts?


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2011-09-27 08:15:26
2011-09-27 08:15:26

They can be. If you look at the futures pricing, you'll see futures contracts that settle in 2013--and futures contracts that settle next month.

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Related Questions

"Futures" and "Futures contracts" are the same thing.

Yes. Dow Jones Futures are future contracts. This is because future contracts practically do not have an expiration date. It is also good because of the fact you can buy and sell single or bulk stock futures.

Futures contracts remain valid even if the original parties to the contract sell the rights.

Single-stock futures In finance, a single-stock futures is a type of futures contracts between two parties to exchange a specified number of stocks in company for a price agreed today (the futures price or the strike price) with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange

Futures trading is the buying and selling of contracts which require you to buy or sell an item on a certain date for a certain price. Most (very close to all) futures contracts are written against commodities rather than stock.

Derivative instruments are classified as: Forward Contracts Futures Contracts Options Swaps

If you are a hedger or a speculator, gold and silver futures contracts offer a world trade at centralized exchanges, trading futures contracts offers more financial.

Commodities are services and goods. Soft commodities are goods that are grown, hard commodities are goods that are mined. A futures is a contract to buy commodities or financial instrument set in certain time in the future. These contracts are traded.

No. Options let you decide whether to go through with the transaction; futures require that you do.

Futures contracts prevent wide variances in prices when seasonal changes affect supply. And to some extent they moderate price drops when supplies exceed the demand.

A futures Executioner is a person that completes contracts between a buyer and a seller for the price and delivery of the stock or goods at a future date.

Open Interest is the total number of outstanding contracts that are held by market participants at the end of the day. It can also be defined as the total number of futures contracts or option contracts that have not yet been exercised (squared off), expired, or fulfilled by delivery.

There are 3 different types of forward pricing: (1) Forward contracts (which include cash forward contracts, minimum price forward contracts and deferred pricing contracts) (2) Futures Contracts and (3) Option Contracts. A forward contract is an agreement between two parties to buy or sell an asset at an agreed future point in time. The trade date and delivery date are separated. A futures contract is a standardized forward contract that is traded on an exchange, like SAFEX. Other than forward contracts, futures contracts are not linked with specific buyers. The intermediary between buyers and sellers is a clearing house that ensures that contracts held for delivery are fulfilled. Options contract convey the right, but not the obligation, to buy (call option) or sell (put option) at a specified price during a specified period of time. The good traded in the market is not the actual commodity, but a futures contract. The farmer will receive a futures contract, which will carry an obligation to buy or sell at some specific future date, if he/she chooses to exercise the option.

Fundamentally, forward and futures contracts have the same function: both types of contracts allow people to buy or sell a specific type of asset at a specific time at a given price. However, it is in the specific details that these contracts differ. First of all, futures contracts are exchange-traded and, therefore, are standardized contracts. Forward contracts, on the other hand, are private agreements between two parties and are not as rigid in their stated terms and conditions. Because forward contracts are private agreements, there is always a chance that a party may default on its side of the agreement. Futures contracts have clearing houses that guarantee the transactions, which drastically lowers the probability of default to almost never. Secondly, the specific details concerning settlement and delivery are quite distinct. For forward contracts, settlement of the contract occurs at the end of the contract. Futures contracts are marked-to-market daily, which means that daily changes are settled day by day until the end of the contract. Furthermore, settlement for futures contracts can occur over a range of dates. Forward contracts, on the other hand, only possess one settlement date. Lastly, because futures contracts are quite frequently employed by speculators, who bet on the direction in which an asset's price will move, they are usually closed out prior to maturity and delivery usually never happens. On the other hand, forward contracts are mostly used by hedgers that want to eliminate the volatility of an asset's price, and delivery of the asset or cash settlement will usually take place.

They can be bought and sold but the obligation in the contract remains valid.

Futures contracts are used to transfer risk between different parties. An easy way to think of it is you sign a contract with the price of the stock that day as the price however you don't pay for the stock until a later date.

Futures Options Trading offers an excellent way to trade the future markets (such as stock markets and shares). Many new trades start by trading futures options and this method is much more reliable than futures contracts.

Negotiated Contracts with regular suppliers on long term basis

Futures contracts are agreements to purchase at a specific date in the future, a specific amount of a specific good for a specific amount of money. A single-stock futures contract is just one with a specific company's stock underlying it. My feeling on these is simple: don't buy futures contracts on securities! If the thing goes the wrong way you're still on the hook for it. All derivatives written against securities should be options contracts; if those stay out of the money you just let them expire worthless and lose nothing more than your premium.

They can be bought and sold but the obligation in the contract remains valid.

Futures are contracts that allows you to buy certain commodities at a certain price by a certain date. Unless closed out, futures contracts are binding and the buyer of the contract must be able to buy the commodities binded by the contract.Options are contracts that gives you the RIGHTS but not the OBLIGATION to buy certain stocks or commodoties at a certain price by a certain date. The main difference is, you can choose to ultimately buy the underlying asset or not, its not binding on the buyer.

A futures markets is a form of investment involving trading futures contracts. Like any investment along those lines there is risk, and although substantial loses can be made there is also the potential for substantial losses.

Oil Futures are contracts that are legally binding. Buyer and seller have the obligation to take and make the delivery. Trading oil futures refers to the price oil is being traded at on the stock market.

The seasonal nature of many commodities would lead to wide variations in supply and price without these contracts.

The YMCA has multiple health clubs in the NC area. These are affordable alternatives to private clubs and don't offer long term contracts.

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