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What is the Difference between interst rate swap and interest rate future?
The simple answer is that an Interest Rate Swap (IRS) is Over The Counter (OTC) while a Futures Contract is Exchange Traded.
How does trading futures differ from stocks?
One can own a stock, but trading futures requires one to contract for the futures. Buying stocks gives you ownership (or your own share) in a part of the company that you're buying into. Trading futures, one enters into a contract for a particular commodity instead of actually buying into it. You can then contract to be a buyer or a seller of that commodity.
How to buy a futures contract?
To buy a futures contract, you need to open a trading account with a brokerage firm, deposit funds, choose the specific futures contract you want to buy, and place an order through your broker. The contract represents an agreement to buy or sell a specific asset at a predetermined price on a future date.
What is the purpose of leverage in the forex market?
The purpose of leverage in the forex market is to significantly increase the returns provided in an investment using instruments such as "Options" "Futures" and "Margin Accounts"
When firm use futures contracts for hedging cash flows and received and paid daily rather than waiting until the end of the contract through a procedure call what?
You wouldn't use a futures contract for that; it would be an OTC swap contract.
What is Open interest in future trade?
Open interest indicates the number of open contracts in futures trading. An open futures contract consists of a long and a short trading a single contract. Some exchanges treat that as 1 open interest while some exchanges treat that as 2 since two parties are involved in the trade. In general, the more open interest a futures contract has, the more liquid it is.
How do you get leverage trading futures?
Contact your broker.
What has the author Torben Juul Andersen written?
Torben Juul Andersen has written: 'Currency and interest rate hedging' -- subject(s): Financial futures, Foreign exchange futures, Forward exchange, Hedging (Finance), Interest rate futures, Option (Contract), Options (Finance) 'Interest raterisk management' -- subject(s): Forecasting, Interest rates, Investments
What statement best explains what a futures contract is?
A futures contract is a contract setting the price and date for a commodity purchase.
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.
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.
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.
What is the Difference between interst rate swap and interest rate future?
The simple answer is that an Interest Rate Swap (IRS) is Over The Counter (OTC) while a Futures Contract is Exchange Traded.
How does one learn how to trade futures?
Futures trading is all about understanding possible financial risks. To learn to trade futures, one must learn the aesthetics of leverage and initial margin.
When did trading begin in foreign currency futures?
In 1972 it launched a contract in foreign currency futures.
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.
