Futures
- Created by: Amywelsh1
- Created on: 24-01-24 16:05
View mindmap
- Futures
- Traded for future settlement at agreed price today
- Agreement between buyer and seller
- Amount for delivery
- Prespecified quantity
- Prespecified future date
- Seller delivers asset at future date in exchange for prespecified amount
- Exchange Traded
- Standardised
- Terminology
- Long: position taken by the buyer of the future
- Short: Position taken by the seller
- Open: The initial trade 'opening a long position'
- Close: Most physical assets do not end up being delivered. They are 'closed-out' instead
- If the buyer does not close-out, they will pay the agreed sum and receive the asset
- Covered - seller actually has the underlying asset
- Naked - seller does not have the asset
Comments
No comments have yet been made