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PRINCIPLES OF FUTURES - Coggle Diagram
PRINCIPLES OF FUTURES
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Contract Specifications
Characteristics
:pencil2:Underlying Instrument
:pencil2:Grade or Quality
:pencil2:Price Quotations
:pencil2:Contract Size
:pencil2:Contract Month
:pencil2:Expiry Date
- Futures are traded in standardized contracts and at organized exchanges
- In order to be well-informed investors, every market participant in the futures market must understand contract specifications.
Offsetting vs Settlement
Offsetting
- Futures contract can be closed-out simply by taking the opposite position, or a contra to the original position.
Settlement
- Any outstanding contract, which has not been closed-out, must be settled at maturity.
Types of Settlement
- Physical settlement
- Cash settlement
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TRADING PRACTICALITIES
:check:Open Position
:check:Close out Position
:check:Long Position
:check:Short Position
:check:Financial Futures
:check:Margin Requirement
:check:Initial Margin
:check:Maintenance Margin
:check:Variable Margin
:check:Margin Call
:check:Basic
:check:Convergence
:check:Volume
:check:Open Interest