| Financial markets | | | | Bond market
Fixed income
Corporate bond
Government bond
Municipal bond
Bond valuation
High-yield debt
This article does not cite any references or sources. ...
Download high resolution version (480x640, 110 KB)Blockade in front of NYSE. Picture taken in April 2004. ...
The bond market, also known as the debit, credit, or fixed income market, is a financial market where participants buy and sell debt securities usually in the form of bonds. ...
This article does not cite any references or sources. ...
A corporate bond is a bond issued by a corporation. ...
A government bond is a bond issued by a national government denominated in the countrys own currency. ...
In the United States, a municipal bond or muni is a bond issued by a state, city or other local government, or their agencies. ...
Bond valuation is the process of determining the fair price of a bond. ...
In finance, a high yield bond (non-investment grade bond, speculative grade bond or junk bond) is a bond that is rated below investment grade at the time of purchase. ...
| | Stock market
Stock
Preferred stock
Common stock
Stock exchange
A stock market is a market for the trading of company stock, and derivatives of same; both of these are securities listed on a stock exchange as well as those only traded privately. ...
For other uses, see Stock (disambiguation). ...
A preferred stock, also known as a preferred share or simply a preferred, is a share of stock carrying additional rights above and beyond those conferred by common stock. ...
Common stock, also referred to as common shares, are, as the name implies, the most usual and commonly held form of stock in a corporation. ...
| | Foreign exchange market
Retail forex
The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. ...
The Retail forex (Retail Currency Trading or Retail Forex or Retail FX) market is a subset of the larger Foreign exchange market. ...
| | Derivative market
Credit derivative
Hybrid security
Options
Futures
Forwards
Swaps
A derivatives market is any market for a derivative security, that is a contract which specifies the right or obligation to receive or deliver future cash flows based on some future event such as the price of an independent security or the performance of an index. ...
// A credit derivative is a financial instrument or derivative (finance) whose price and value derives from the creditworthiness of the obligations of a third party, which is isolated and traded. ...
Definition A hybrid security, as the name implies, is a security that combines two or more different financial instruments. ...
In finance options are types of derivative contracts, including call options and put options, where the future payoffs to the buyer and seller of the contract are determined by the price of another security, such as a common stock. ...
A forward contract is an agreement between two parties to buy or sell an asset (which can be of any kind) at a pre-agreed future point in time. ...
For the Thoroughbred horse racing champion, see: Swaps (horse). ...
| | Other Markets
Commodity market
OTC market
Real estate market
Spot market
Chicago Board of Trade Futures market Commodity markets are markets where raw or primary products are exchanged. ...
Over-the-counter (OTC) trading is to trade financial instruments such as stocks, bonds, commodities or derivatives directly between two parties. ...
Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ...
Template:The Spot Market The Spot Market or Cash Marketis a commodities or securities market in which goods are sold for cash and delivered immediately. ...
| | Finance series
Financial market
Financial market participants
Corporate finance
Personal finance
Public finance
Banks and Banking
Financial regulation
Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. ...
This article does not cite any references or sources. ...
There are two basic financial market participant catagories, Investor vs. ...
Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ...
Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit. ...
This article does not cite any references or sources. ...
For other uses, see Bank (disambiguation). ...
Financial supervision is government supervision of financial institutions by regulators. ...
| | v • d • e | In finance, a futures contract is a standardized contract, traded on a futures exchange, to buy or sell a certain underlying instrument at a certain date in the future, at a specified price. The future date is called the delivery date or final settlement date. The pre-set price is called the futures price. The price of the underlying asset on the delivery date is called the settlement price. Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. ...
A contract is a legally binding exchange of promises or agreement between parties that the law will enforce. ...
The introduction to this article provides insufficient context for those unfamiliar with the subject matter. ...
In finance, an underlying is an investment from which a derivative security is derived. ...
Financial instruments package financial capital in readily tradeable forms - they do not exist outside the context of the financial markets. ...
A futures contract gives the holder the obligation to buy or sell, which differs from an options contract, which gives the holder the right, but not the obligation. In other words, the owner of an options contract may exercise the contract. Both parties of a "futures contract" must fulfill the contract on the settlement date. The seller delivers the commodity to the buyer, or, if it is a cash-settled future, then cash is transferred from the futures trader who sustained a loss to the one who made a profit. To exit the commitment prior to the settlement date, the holder of a futures position has to offset his position by either selling a long position or buying back a short position, effectively closing out the futures position and its contract obligations. In finance options are types of derivative contracts, including call options and put options, where the future payoffs to the buyer and seller of the contract are determined by the price of another security, such as a common stock. ...
In finance, a postion may be: A commitment to buy or sell a given amount of securities or commodities; The amount of securities or commodities held by a person, firm, or institution; or The ownership status of a persons or institutions investments. ...
This article needs to be cleaned up to conform to a higher standard of quality. ...
The short position refers to the selling entity in a forward contract. ...
Futures contracts, or simply futures, are exchange traded derivatives. The exchange's clearinghouse acts as counterparty on all contracts, sets margin requirements, etc. Derivatives traders at the Chicago Board of Trade. ...
In banking and finance, clearing denotes all activities from the time a transaction is made until it is finally settled (see settlement). ...
A counterparty is a legal and financial term. ...
In finance, a margin is collateral that the holder of a position in securities, options, or futures contracts has to deposit to cover the credit risk of his counterparty. ...
Futures vs. Forwards
While futures and forward contracts are both a contract to deliver a commodity on a future date at a prearranged price, they are different in several respects: A forward contract is an agreement between two parties to buy or sell an asset (which can be of any kind) at a pre-agreed future point in time. ...
- Forwards transact only when purchased and on the settlement date. Futures, on the other hand, are rebalanced, or "marked to market," every day to the daily spot price of a forward with the same agreed-upon delivery price and underlying asset.
- The fact that forwards are not rebalanced daily means that, due to movements in the price of the underlying asset, a large differential can build up between the forward's delivery price and the settlement price.
- This means that one party will incur a big loss at the time of delivery (assuming they must transact at the underlying's spot price to facilitate receipt/delivery).
- This in turn creates a credit risk. More generally, the risk of a forward contract is that the supplier will be unable to deliver the required commodity, or that the buyer will be unable to pay for it on the delivery day.
- The rebalancing of futures eliminates much of this credit risk by forcing the holders to update daily to the price of an equivalent forward purchased that day. This means that there will usually be very little additional money due on the final day to settle the futures contract.
- In addition, the daily futures-settlement failure risk is borne by an exchange, rather than an individual party, limiting credit risk in futures.
- Example for a futures contract with a $100 price: Let's say that on day 50, a forward with a $100 delivery price (on the same underlying asset as the future) costs $88. On day 51, that forward costs $90. This means that the mark-to-market would require the holder of one side of the future to pay $2 on day 51 to track the changes of the forward price. This money goes, via margin accounts, to the holder of the other side of the future. (A forward-holder, however, would pay nothing until settlement on the final day, potentially building up a large balance. So, except for tiny effects of convexity bias or possible allowance for credit risk, futures and forwards with equal delivery prices result in the same total loss or gain, but holders of futures experience that loss/gain in daily increments which track the forward's daily price changes, while the forward's spot price converges to the settlement price.)
- Futures are always traded on an exchange, whereas forwards always trade over-the-counter, or can simply be a signed contract between two parties.
- Futures are highly standardised, whereas some forwards are unique.
- In the case of physical delivery, the forward contract specifies to whom to make the delivery. The counterparty for delivery on a futures contract is chosen by the clearinghouse.
In some extreme cases, some exchanges tolerate 'nonconvergence', the failure of futures contracts and the value of the physical commodities they represent to reach the same value on 'contract settlement' day at the designated delivery points. An example of this is the CBOT (Chicago Board of Trade)Soft Red Winter wheat (SRW) futures. SRW futures have settled more than 20¢ apart on settlement day and as much as $1.00 difference between settlement days. Only a few participants holding CBOT SRW futures contracts are qualified by the CBOT to make or receive delivery of commodities to settle futures contracts. Therefore, it's impossible for almost any individual producer to 'hedge' efficiently when relying on the final settlement of a futures contract for SRW. The trend is the CBOT continuing to restrict those entities who can actually participate in settling contracts with commodity to only those that can ship or receive large quantities of railroad cars and multiple barges at a few select sites. The CFTC (Commodity Futures Trading Commission - a regulatory agency headed by a political appointee), which has oversight of the futures market, has made no comment as to why this trend is allowed to continue since economic theory and CBOT publications maintain that convergence of contracts with the price of the underlying commodity they represent is the basis of integrity for a futures market. It follows that the function of 'price discovery', the ability of the markets to discern the appropriate value of a commodity reflecting current conditions, is degraded in relation to the discrepancy in price and the inability of producers to enforce contracts with the commodities they represent. The introduction to this article provides insufficient context for those unfamiliar with the subject matter. ...
Over-the-counter (OTC) trading is to trade financial instruments such as stocks, bonds, commodities or derivatives directly between two parties. ...
A clearing house is an organization affiliated with a securities or derivatives exchange that completes the transactions on that exchange by seeing to validation, delivery, and settlement. ...
Standardization Futures contracts ensure their liquidity by being highly standardized, usually by specifying: Market liquidity is a business, economics or investment term that refers to an assets ability to be easily converted through an act of buying or selling without causing a significant movement in the price and with minimum loss of value. ...
- The underlying asset or instrument. This could be anything from a barrel of crude oil to a short term interest rate.
- The type of settlement, either cash settlement or physical settlement.
- The amount and units of the underlying asset per contract. This can be the notional amount of bonds, a fixed number of barrels of oil, units of foreign currency, the notional amount of the deposit over which the short term interest rate is traded, etc.
- The currency in which the futures contract is quoted.
- The grade of the deliverable. In the case of bonds, this specifies which bonds can be delivered. In the case of physical commodities, this specifies not only the quality of the underlying goods but also the manner and location of delivery. For example, the NYMEX Light Sweet Crude Oil contract specifies the acceptable sulfur content and API specific gravity, as well as the location where delivery must be made.
- The delivery month.
- The last trading date.
- Other details such as the commodity tick, the minimum permissible price fluctuation.
In finance, an underlying is an investment from which a derivative security is derived. ...
Pumpjack pumping an oil well near Sarnia, Ontario Petroleum (from Greek petra – rock and elaion – oil or Latin oleum – oil ) or crude oil is a thick, dark brown or greenish liquid. ...
In finance, an underlying is an investment from which a derivative security is derived. ...
Nominal or notional amounts outstanding are defined as the gross nominal or notional value of all deals concluded and not yet settled on the reporting date. ...
An interest rate is the price a borrower pays for the use of money he does not own, and the return a lender receives for deferring his consumption, by lending to the borrower. ...
The word commodity has a different meaning in business than in Marxian political economy. ...
For futures contracts specifying physical delivery, the delivery month is the month in which the seller must deliver, and the buyer must accept and pay for, the underlying. ...
Futures exchanges establish a minimum amount that the price of a commodity can fluctuate upward or downward. ...
Margin To minimize credit risk to the exchange, traders must post margin or a performance bond, typically 5%-15% of the contract's value. Credit risk is the risk of loss due to a debtors non-payment of a loan or other line of credit (either the principal or interest (coupon) or both). ...
In finance, a margin is collateral that the holder of a position in securities, options, or futures contracts has to deposit to cover the credit risk of his counterparty. ...
A performance bond is a surety bond issued by an insurance company to guarantee satisfactory completion of a project by a contractor. ...
Margin requirements are waived or reduced in some cases for hedgers who have physical ownership of the covered commodity or spread traders who have offsetting contracts balancing the position. It has been suggested that this article or section be merged into Hedge (finance). ...
Seasonal spread traders are spread traders that take advantage of seasonal patterns by holding long and short contracts simultaneously in the same or a related commodity markets. ...
Initial margin is paid by both buyer and seller. It represents the loss on that contract, as determined by historical price changes, that is not likely to be exceeded on a usual day's trading.
A futures account is marked to market daily. If the margin drops below the margin maintenance requirement established by the exchange listing the futures, a margin call will be issued to bring the account back up to the required level.
Margin-equity ratio is a term used by speculators, representing the amount of their trading capital that is being held as margin at any particular time. The low margin requirements of futures results in substantial leverage of the investment. However, the exchanges require a minimum amount that varies depending on the contract and the trader. The broker may set the requirement higher, but may not set it lower. A trader, of course, can set it above that, if he doesn't want to be subject to margin calls. Speculation is the buying, holding, and selling of stocks, commodities, futures, currencies, collectibles, real estate, or any valuable thing to profit from fluctuations in its price as opposed to buying it for use or for income - dividends, rent etc. ...
Return on margin (ROM) is often used to judge performance because it represents the gain or loss compared to the exchange’s perceived risk as reflected in required margin. ROM may be calculated (realized return) / (initial margin). The Annualized ROM is equal to (ROM+1)(year/trade_duration)-1. For example if a trader earns 10% on margin in two months, that would be about 77% annualized.
Settlement Settlement is the act of consummating the contract, and can be done in one of two ways, as specified per type of futures contract: - Physical delivery - the amount specified of the underlying asset of the contract is delivered by the seller of the contract to the exchange, and by the exchange to the buyers of the contract. Physical delivery is common with commodities and bonds. In practice, it occurs only on a minority of contracts. Most are cancelled out by purchasing a covering position - that is, buying a contract to cancel out an earlier sale (covering a short), or selling a contract to liquidate an earlier purchase (covering a long). The Nymex crude futures contract uses this method of settlement upon expiration.
- Cash settlement - a cash payment is made based on the underlying reference rate, such as a short term interest rate index such as Euribor, or the closing value of a stock market index. A futures contract might also opt to settle against an index based on trade in a related spot market. Ice Brent futures use this method.
- Expiry is the time when the final prices of the future is determined. For many equity index and interest rate futures contracts (as well as for most equity options), this happens on the third Friday of certain trading month. On this day the t+1 futures contract becomes the t forward contract. For example, for most CME and CBOT contracts, at the expiry on December, the March futures become the nearest contract. This is an exciting time for arbitrage desks, as they will try to make rapid gains during the short period (normally 30 minutes) where the final prices are averaged from. At this moment the futures and the underlying assets are extremely liquid and any mispricing between an index and an underlying asset is quickly traded by arbitrageurs. At this moment also, the increase in volume is caused by traders rolling over positions to the next contract or, in the case of equity index futures, purchasing underlying components of those indexes to hedge against current index positions. On the expiry date, a European equity arbitrage trading desk in London or Frankfurt will see positions expire in as many as eight major markets almost every half an hour.
A reference rate is any publicly available quoted number or value that is used by the parties to a financial contract. ...
Euribor-12m value between years 2001 and 2006 Euribor (Euro Interbank Offered Rate) is a daily reference rate based on the averaged interest rates at which banks offer to lend unsecured funds to other banks in the euro wholesale money market (or interbank market). ...
A comparison of three major stock indices: the NASDAQ Composite, Dow Jones Industrial Average, and S&P 500. ...
President George W. Bush at the CME (March 6, 2001). ...
The Chicago Board of Trade (CBOT) NYSE: BOT, established in 1848, is the worlds oldest futures and options exchange. ...
Pricing The situation where the price of a commodity for future delivery is higher than the spot price, or where a far future delivery price is higher than a nearer future delivery, is known as contango. The reverse, where the price of a commodity for future delivery is lower than the spot price, or where a far future delivery price is lower than a nearer future delivery, is known as backwardation. Contango is a futures market term. ...
Backwardation, sometimes incorrectly referred to as backwardization, is the situation where futures contracts closer to expiration trade at higher prices than those that are far from expiration. ...
When the deliverable asset exists in plentiful supply, or may be freely created, then the price of a future is determined via arbitrage arguments. The forward price represents the expected future value of the underlying discounted at the risk free rate—as any deviation from the theoretical price will afford investors a riskless profit opportunity and should be arbitraged away; see rational pricing of futures. In economics and finance, arbitrage is the practice of taking advantage of a price differential between two or more markets: a combination of matching deals are struck that capitalize upon the imbalance, the profit being the difference between the market prices. ...
In finance, discounting is the process of finding the current value of an amount of cash at some future date, and along with compounding cash from the basis of time value of money calculations. ...
The risk-free interest rate is the interest rate that it is assumed can be obtained by investing in financial instruments with no risk. ...
Rational pricing is the assumption in financial economics that asset prices (and hence asset pricing models) will reflect the arbitrage-free price of the asset as any deviation from this price will be arbitraged away. This assumption is useful in pricing fixed income securities, particularly bonds, and is fundamental to...
Thus, for a simple, non-dividend paying asset, the value of the future/forward, F(t), will be found by compounding the present value S(t) at time t to maturity T by the rate of risk-free return r.
 or, with continuous compounding  This relationship may be modified for storage costs, dividends, dividend yields, and convenience yields.
In a perfect market the relationship between futures and spot prices depends only on the above variables; in practice there are various market imperfections (transaction costs, differential borrowing and lending rates, restrictions on short selling) that prevent complete arbitrage. Thus, the futures price in fact varies within arbitrage boundaries around the theoretical price.
The above relationship, therefore, is typical for stock index futures, treasury bond futures, and futures on physical commodities when they are in supply (e.g. on corn after the harvest). However, when the deliverable commodity is not in plentiful supply or when it does not yet exist, for example on wheat before the harvest or on Eurodollar Futures or Federal funds rate futures (in which the supposed underlying instrument is to be created upon the delivery date), the futures price cannot be fixed by arbitrage. In this scenario there is only one force setting the price, which is simple supply and demand for the future asset, as expressed by supply and demand for the futures contract. The federal funds rate is the interest rate at which private depository institutions lend balances (federal funds) at the Federal Reserve to other depository institutions overnight. ...
In a deep and liquid market, this supply and demand would be expected to balance out at a price which represents an unbiased expectation of the future price of the actual asset and so be given by the simple relationship
 . In fact, this relationship will hold in a no-arbitrage setting when we take expectations with respect to the risk-neutral probability. In other words: a futures price is martingale with respect to the risk-neutral probability. In mathematical finance, a risk-neutral measure is a probability measure in which todays fair (i. ...
A stopped Brownian motion as an example for a martingale In probability theory, a martingale is a stochastic process (i. ...
With this pricing rule, a speculator is expected to break even when the futures market fairly prices the deliverable commodity.
In a shallow and illiquid market, or in a market in which large quantities of the deliverable asset have been deliberately withheld from market participants (an illegal action known as cornering the market), the market clearing price for the future may still represent the balance between supply and demand but the relationship between this price and the expected future price of the asset can break down. In business, cornering the market is an illegal attempt to buy up enough of a particular commodity to allow the price to be manipulated. ...
Futures contracts and exchanges There are many different kinds of futures contracts, reflecting the many different kinds of tradable assets of which they are derivatives. For information on futures markets in specific underlying commodity markets, follow the links. Derivatives traders at the Chicago Board of Trade. ...
Chicago Board of Trade Futures market Commodity markets are markets where raw or primary products are exchanged. ...
Trading on commodities began in Japan in the 18th century with the trading of rice and silk, and similarly in Holland with tulip bulbs. Trading in the US began in the mid 19th century, when central grain markets were established and a marketplace was created for farmers to bring their commodities and sell them either for immediate delivery (also called spot or cash market) or for forward delivery. These forward contracts were private contracts between buyers and sellers and became the forerunner to today's exchange-traded futures contracts. Although contract trading began with traditional commodities such grains, meat and livestock, exchange trading has expanded to include metals, energy, currency and currency indexes, equities and equity indexes, government interest rates and private interest rates. The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. ...
This article is about short-term financing. ...
The bond market, also known as the debit, credit, or fixed income market, is a financial market where participants buy and sell debt securities usually in the form of bonds. ...
The term equity derivative describes a class of financial instruments whose value is at least partly derived from one or more underlying equity securities. ...
This article is in need of attention. ...
This article does not cite any references or sources. ...
Contracts on financial instruments was introduced in the 1970s by the Chicago Mercantile Exchange(CME) and these instruments became hugely successful and quickly overtook commodities futures in terms of trading volume and global accessibility to the markets. This innovation led to the introduction of many new futures exchanges worldwide, such as the London International Financial Futures Exchange in 1982 (now Euronext.liffe), Deutsche Terminbörse (now Eurex) and the Tokyo Commodity Exchange (TOCOM). Today, there are more than 75 futures and futures options exchanges worldwide trading to include: President George W. Bush at the CME (March 6, 2001). ...
This entry is about LIFFE until the takeover by Euronext The London International Financial Futures and Options Exchange (LIFFE, pronounced life as in human life, and never liff-eee, except by yokels) was the name of a futures exchange based in London, prior to its takeover by Euronext in January...
Euronext. ...
Eurex is a major futures and options exchange for European benchmark derivatives featuring open and low-cost electronic access globally. ...
The Tokyo Commodity Exchange (TOCOM) is a non-profit organization, and regulates trading of futures and option products of all commodities in Japan. ...
- CME Group (formerly CBOT and CME) -- Currencies, Various Interest Rate derivatives (including US Bonds); Agricultural (Corn, Soybeans, Soy Products, Wheat, Pork, Cattle, Butter, Milk); Index (Dow Jones Industrial Average); Metals (Gold, Silver), Index (NASDAQ, S&P, etc)
- ICE Futures - the International Petroleum Exchange trades energy including crude oil, heating oil, natural gas and unleaded gas and merged with IntercontinentalExchange(ICE)to form ICE Futures.
- Euronext.liffe
- Sydney Futures Exchange
- London Commodity Exchange - softs: grains and meats. Inactive market in Baltic Exchange shipping.
- Tokyo Stock Exchange TSE (JGB Futures, TOPIX Futures)
- Tokyo Commodity Exchange TOCOM
- Tokyo Financial Exchange TFX (Euroyen Futures, OverNight CallRate Futures, SpotNext RepoRate Futures)
- Osaka Securities Exchange OSE (Nikkei Futures, RNP Futures)
- London Metal Exchange - metals: copper, aluminium, lead, zinc, nickel and tin.
- New York Board of Trade - softs: cocoa, coffee, cotton, orange juice, sugar
- New York Mercantile Exchange - energy and metals: crude oil, gasoline, heating oil, natural gas, coal, propane, gold, silver, platinum, copper, aluminum and palladium
- Futures exchange
- Futures on many Single-stock futures
The Chicago Mercantile Exchange (CME or, simply, The Merc) (NYSE: CME) is an American financial exchange based in Chicago. ...
Pumpjack pumping an oil well near Sarnia, Ontario Petroleum (from Greek petra – rock and elaion – oil or Latin oleum – oil ) or crude oil is a thick, dark brown or greenish liquid. ...
This article is about the fossil fuel. ...
Euronext. ...
The Sydney Futures Exchange (SFE) is both a futures exchange and options exchange located in Australia. ...
The Baltic Exchange is a UK company that operates the premier global marketplace for shipbrokers, ship owners and charterers. ...
The Tokyo Stock Exchange ), or TSE, is one of the largest stock exchange markets in the world by monetary volume located in Tokyo, Japan, second only to the New York Stock Exchange. ...
The Tokyo Commodity Exchange (TOCOM) is a non-profit organization, and regulates trading of futures and option products of all commodities in Japan. ...
Osaka Securities Exchange Building in Chuo-ku, Osaka The Osaka Securities Exchange Co. ...
The London Metal Exchange or LME is the futures exchange with the worlds largest market in options and futures contracts on base and other metals. ...
Copper has played a significant part in the history of mankind, which has used the easily accessible uncompounded metal for nearly 10,000 years. ...
Aluminum redirects here. ...
This article is about the metal. ...
General Name, symbol, number zinc, Zn, 30 Chemical series transition metals Group, period, block 12, 4, d Appearance bluish pale gray Standard atomic weight 65. ...
For other uses, see Nickel (disambiguation). ...
This article is about the metallic chemical element. ...
The New York Board of Trade (NYBOT) is a physical commodity futures exchange located in New York, New York. ...
For other uses, see Cocoa (disambiguation). ...
For other uses, see Coffee (disambiguation). ...
For other uses, see Cotton (disambiguation). ...
For other uses, see Orange juice (disambiguation). ...
This article is about sugar as food and as an important and widely traded commodity. ...
The New York Mercantile Exchange**** NOTE the AMENX is FAKE, created by york-commodities to scam your money, if you send money you will never see it again**** You have been warned. ...
Pumpjack pumping an oil well near Sarnia, Ontario Petroleum (from Greek petra – rock and elaion – oil or Latin oleum – oil ) or crude oil is a thick, dark brown or greenish liquid. ...
Petrol redirects here. ...
Heating oil, or burning oil, also known in the United States as No. ...
This article is about the fossil fuel. ...
Coal Coal (IPA: ) is a fossil fuel formed in swamp ecosystems where plant remains were saved by water and mud from oxidization and biodegradation. ...
Propane is a three-carbon alkane, normally a gas, but compressible to a liquid that is transportable. ...
GOLD refers to one of the following: GOLD (IEEE) is an IEEE program designed to garner more student members at the university level (Graduates of the Last Decade). ...
This article is about the chemical element. ...
General Name, Symbol, Number platinum, Pt, 78 Chemical series transition metals Group, Period, Block 10, 6, d Appearance grayish white Standard atomic weight 195. ...
Copper has played a significant part in the history of mankind, which has used the easily accessible uncompounded metal for nearly 10,000 years. ...
Aluminum is a soft and lightweight metal with a dull silvery appearance, due to a thin layer of oxidation that forms quickly when it is exposed to air. ...
For other uses, see Palladium (disambiguation). ...
The introduction to this article provides insufficient context for those unfamiliar with the subject matter. ...
Single-stock futures (SSFs) are securities that share some of the features of equities and also some of those of traditional commodity futures. ...
Who trades futures? Futures traders are traditionally placed in one of two groups: hedgers, who have an interest in the underlying commodity and are seeking to hedge out the risk of price changes; and speculators, who seek to make a profit by predicting market moves and buying a commodity "on paper" for which they have no practical use. It has been suggested that this article or section be merged into Hedge (finance). ...
Speculation is the buying, holding, and selling of stocks, commodities, futures, currencies, collectibles, real estate, or any valuable thing to profit from fluctuations in its price as opposed to buying it for use or for income - dividends, rent etc. ...
Hedgers typically include producers and consumers of a commodity. Consumers refers to individuals or households that purchase and use goods and services generated within the economy. ...
For example, in traditional commodities markets, farmers often sell futures contracts for the crops and livestock they produce to guarantee a certain price, making it easier for them to plan. Similarly, livestock producers often purchase futures to cover their feed costs, so that they can plan on a fixed cost for feed. In modern (financial) markets, "producers" of interest rate swaps or equity derivative products will use financial futures or equity index futures to reduce or remove the risk on the swap. Chicago Board of Trade Commodity market Commodity markets are markets where raw or primary products are exchanged. ...
For other uses, see Farmer (disambiguation). ...
The term equity derivative describes a class of financial instruments whose value is at least partly derived from one or more underlying equity securities. ...
The social utility of futures markets is considered to be mainly in the transfer of risk, and increase liquidity between traders with different risk and time preferences, from a hedger to a speculator for example.
Options on futures In many cases, options are traded on futures. A put is the option to sell a futures contract, and a call is the option to buy a futures contract. For both, the option strike price is the specified futures price at which the future is traded if the option is exercised. See the Black model, which is the most popular method for pricing these option contracts. In finance options are types of derivative contracts, including call options and put options, where the future payoffs to the buyer and seller of the contract are determined by the price of another security, such as a common stock. ...
A put option (sometimes simply called a put) is a financial contract between two parties, the buyer and the writer of the option. ...
This article does not cite any references or sources. ...
The strike price, or exercise price, is a key variable in a derivatives contract between two parties. ...
The Black model (sometimes known as the Black-76 model) is a variant the Black-Scholes option pricing model. ...
Futures Contract Regulations All futures transactions in the United States are regulated by the Commodity Futures Trading Commission (CFTC), an independent agency of the United States Government. The Commission has the right to hand out fines and other punishments for an individual or company who breaks any rule. Although by law the commission regulates all transactions, each exchange can have its own rule, and under contract can fine companies for different things or extend the fine that the CFTC hands out. The Commodity Futures Trading Commission (CFTC) is an independent agency of the United States Government, created by Congress in 1974. ...
Independent agencies of the United States government are those that exist outside of the departments of the executive branch. ...
The government of the United States, established by the United States Constitution, is a federal republic of 50 states, a few territories and some protectorates. ...
A fine is money paid as a financial punishment for the commission of minor crimes or as the settlement of a claim. ...
For other uses, see Law (disambiguation). ...
The CFTC publishes weekly reports containing details of the open interest of market participants for each market-segment, which has more than 20 participants. These reports are released every Friday (including data from the previous Tuesday) and contain data on open interest split by reportable and non-reportable open interest as well as commercial and non-commercial open interest. This type of report is referred to as 'Commitments-Of-Traders'-Report, COT-Report or simply COTR.
See also Topics in finance include: // Finance an overview Arbitrage Capital (economics) Capital asset pricing model Cash flow Cash flow matching Debt Default Consumer debt Debt consolidation Debt settlement Credit counseling Bankruptcy Debt diet Debt-snowball method Discounted cash flow Financial capital Funding Financial modeling Entrepreneur Entrepreneurship Fixed income analysis Gap financing...
A Freight derivative is a financial instrument for trading in future levels of freight rates, primarily for dry bulk carriers and tankers. ...
Seasonal spread traders are spread traders that take advantage of seasonal patterns by holding long and short positions in futures contracts simultaneously in the same or a related commodity markets. ...
Prediction markets are speculative markets created for the purpose of making predictions. ...
A 1256 Contract is a term used by the Internal Revenue Service to denote any regulated futures contracts, foreign currency contracts, non-equity options, dealer equity options, and dealer security futures options. ...
References - John C. Hull, Options, Futures, and Other Derivatives, 6th edition 2006, Prentice-Hall
- Keith Redhead, (31 Oct 1996), Financial Derivatives: An Introduction to Futures, Forwards, Options and Swaps, Prentice-Hall
- Abraham Lioui & Patrice Poncet, (March 30, 2005), Dynamic Asset Allocation with Forwards and Futures, Springer
- Valdez, Steven, . An Introduction To Global Financial Markets. Macmillan Press Ltd. (ISBN 0-333-76447-1)
- Arditti, Fred D., 19nn. Derivatives: A Comprehensive Resource for Options, Futures, Interest Rate Swaps, and Mortgage Securities. Harvard Business School Press. ISBN 0-87584-560-6.
Futures Exchanges & Regulators
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