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A futures contract is a standardized agreement between two parties to buy or sell an asset at a predetermined price on a specified future date. It allows traders to hedge against price fluctuations or speculate on future price movements of commodities, currencies, or financial instruments. By locking in prices ahead of time, it provides certainty and can help manage risk in volatile markets.
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What statement best explains what a futures contract is?
A futures contract is a contract setting the price and date for a commodity purchase.
Which if the following best explains what a futures contract is?
(apex) a contract setting the price and date for a commodity purchase.
Explain the difference between a call option and a long position in a futures contract?
The only difference between a long call option and a long futures position is the derivative itself--one of them is an option, the other is a futures contract.
Explain the difference between a put option and a short position in a futures contract?
Well, the first difference is the root difference between a futures contract and an option contract: in a futures contract you MUST complete the sale at the end of the contract (if you didn't buy it back before the settlement date) but in an option you CAN.Once we're past that, the short position in a futures contract--the person who has the item the contract is derived from, such as a thousand bushels of wheat--is the same as the buyer of a put. Both of them have the thing now, and will transfer title to it after settlement or exercise.
What are the differences between future and option contract?
There's one main difference and it's huge: An option contract gives the person who buys it the privilege of doing whatever it is the contract is written for. A futures contract imposes an obligation on the buyer. There are also liquidity requirements and requirements to pay performance bonds in futures trading that don't exist in options trading, but the real basic difference is that an options buyer can do something and a futures trader has to.
What statement best explains what a futures contract is?
A futures contract is a contract setting the price and date for a commodity purchase.
What best explains what a future's contract is?
A futures contract is a contract setting the price and date for a commodity purchase.
What Best Explains What Futures Contract Is?
(apex) a contract setting the price and date for a commodity purchase.
Which if the following best explains what a futures contract is?
(apex) a contract setting the price and date for a commodity purchase.
Is a futures contract a type of options contract where you are either a seller of a call or a seller of a put?
A futures contract is different from an option contract: an option contract allows the buyer to choose to exercise the contract. A futures contract obligates you to do it. Example: You and I decide to buy calls on 100 shares of Acme stock at 22 with June 1 settlement date. You buy a futures contract, and I get an option contract. On May 27, Acme drops to 10 and stays there. On June 1, you must buy 100 shares of $10 stock for $22 per share. My option is out of the money, and I never exercise it. The "obligation" part explains why futures contracts on stock are very, very rare. Almost all futures contracts are written against commodities.
How do you purchase a futures contract?
You purchase a futures contract by first opening a futures trading account, which is a margin account, with a futures broker. Once that is done, simply choose the specific futures contract you wish to buy and then pay its "Initial Margin", which is a deposit needed to start a futures trade.
Where can one find information on Emini futures trading?
Information on Emini futures trading can be found on the website Trading Concepts which explains the nature of a futures contract, and how much it costs to complete the trading. Detailed information could also be found by consulting a financial adviser.
What type of company is the Commodity Futures market?
there are two types that are part of the commodity futures market. A normal futures market is one where the price of the nearby contract is less than the price of the distant futures contract. The other is an inverted futures market, the price of the near contract is greater then the price of the distant contract.
Which of the following best explains why commodity futures contracts are transferable?
They can be bought and sold but the obligation in the contract remains a valid
What best explains the term social contract?
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How many bushels of wheat in a futures contract?
A wheat futures contract covers 5000 bushels of whatever wheat (there are different kinds) is specified in the contract.
What type of market is the commodity market?
there are two types that are part of the commodity futures market. A normal futures market is one where the price of the nearby contract is less than the price of the distant futures contract. The other is an inverted futures market, the price of the near contract is greater then the price of the distant contract.
