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Futures contracts

• Are instruments predicated on a cash commodity or currency, a financial instrument, or an index. These are standardized contracts which are traded on organized exchanges. Also, these contracts are subject to industry and exchange regulations and government regulatory bodies and laws. The standardization is one of the key factors which differentiates these instruments from forward contracts. Other factors are the standardization of margin or performance bond procedures and the high degree of anonymous offset. Futures contracts can be offset by a trade opposite to the initial transaction, and EFP, or a good delivery. Good deliveries can be satisfied by either the delivery of the actual commodity or financial instrument or by a final cash payment for Cash Settlement markets.

 
 Embedded terms in definition
 Bond
Cash commodity
Cash settlement
Cash
Commodity
Currency
Delivery
Efp
Exchange
Forward contract
Forward
Futures contract
Futures
Good delivery
Index
Industry
Instruments
Margin
Offset
Organized exchange
Performance bond
Settlement
Subject
Trade
 
 Related Terms
 

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