Financial Futures-Future Trade Security at a Specified Price

Dragan Momirovic

Ekonomika, Journal for Economic Theory and Practice and Social Issues, 2008, vol. 54, issue 3-4

Abstract: Financial derivatives market, futures contracts in particular, are integral part of global capital market in which financial instruments – derivates have been devised, by interests of big investors for more efficient risk protection, fluctuation of prices of financial assets as well as for financial speculation protection. In finance, a futures contract is a standardized contract to buy or sell a certain financial instruments at a certain date in the future, at a specified price. In finacial market futures contracts could be devided into index based, currency futures and interese rate futures contratcs.Basicly they consists of compensation transactions. Financial transactions are based on hedging principle (elimination of risk), eliminatiing the risk of long position with additional „short positon“ or elimination of short position by additional ‘’long position’’. Clearinghouses are authorised and in charge for execution of obligations on behalf of members and protection from significant fluctuation of prices which could cause to market participiant huge potential losses on whose accounts sellers and buyers are required to put in deposites based on clearinghouse margin requirements, daily settlement of balances and updated margins of sellers and buyers.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ags:sereko:288867

DOI: 10.22004/ag.econ.288867

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