Futures Flashcards
What is a futures contract?
An obligation to sell or buy an asset at a later date at an agreed-upon price
An obligation to sell or buy an asset at a later date at an agreed-upon price
What is a futures contract?
Where are future contracts most understandable?
Commodities like corn, oil
Commodities like corn, oil
Where are future contracts most understandable?
How does buying a futures contract work?
A percentage of the price called an initial margin is paid
A percentage of the price called an initial margin is paid
How does buying a futures contract work?
Benefits of establishing a price in advance?
Makes the businesses on both sides of the contract less vulnerable to big price swings
Makes the businesses on both sides of the contract less vulnerable to big price swings
Benefits of establishing a price in advance?
