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Principles of Futures - Coggle Diagram
Principles of Futures
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- Open Position vs Close Out Position
- Long Position vs Short Position
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Offsetting
- Future contract can be closed-out simply by taking opposite position.
Settlement
- Any outstanding contract, which has not been closed-out, must settled at maturity.
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- Commodity Futures vs Financial Futures
Commodity Futures
- The futures which the underlying asset are the commodity products.
- Commodity futures include agricultural futures, fertilizer, wood and metal futures.
Financial Futures
- The future which the underlying asset are the financial asset
- Financial futures include currency future, interest rates futures, stock index futures and single stock futures.
- Basic Requirements for a Viable Futures Market
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