The common features of futures are:-
Futures are exchange-traded derivatives.
Futures are highly standardized. This standardization is ensured by specifying (a)
The underlying asset – The particular asset as well as the quantity are specified in the futures contract.
The currency - The currency in which the contract is to be executed is also specified.
Settlement - The delivery month and the last trading date are also mentioned in the contract.
Futures are used for hedging, particularly in a bear market. Those who have an interest in the underlying asset can protect themselves from the risk of price changes via futures contracts.
Futures have lower transaction costs than other debt instruments.
They also have high liquidity, since buyers and sellers of futures contracts can be found easily...
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