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Futures

What are futures…

                 Futures are exchanged traded derivatives.  Futures contract are contracts to buy or sell a specified commodity at a certain date in the future at a market determined price.  These contracts are traded on exchanges called future exchanges.  The market determined price is called the future price.  Unlike stocks and bonds that are direct securities, futures are securities that fall under the type derivative contract.    

                The future price is determined by the delta of the supply and demand among competing buy and sell orders at that time.  The delivery date or final settlement date is called the future date.   Future contracts can have various underlying assets both tangible (currency, securities and etcetera) and intangible (stocks, interest rates and cetera). 

                Unlike options, a Future contract gives the holder the OBLIGATION to make or take delivery under terms of the contract.  This means that both parties of a future contract must fulfill the contract on the settlement date.  You can however exit the commitment prior to the settlement date buy either purchasing a long position or short position or therefore closing out the futures position and its contract obligations.

 

Exchanges

CME Group  for à 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)

Dubai Mercantile Exchange for à energy and commodities

ICE Futures for à the International Petroleum Exchange trades energy, crude oil, heating oil, natural gas and unleaded gas.

Korea Exchange for à Foreign Exchange, Interest Rate Instruments, Gold Futures, Lean Hog Futures

London Metal Exchange forà metals: copper, aluminum, lead, zinc, nickel, tin and steel

New York Board of Trade for à cocoa, coffee, cotton, orange juice, sugar

New York Mercantile Exchange forà energy and metals: crude oil, gasoline, heating oil, natural gas, coal, propane, gold, silver, platinum, copper, aluminum and palladium

NYSE Euronext for à grains and meats

Osaka Securities Exchange OSE for à Nikkei Futures and RNP Futures

Singapore Exchange SGX for à Commodity Futures, Interest Rate Futures, Equity Index Futures

South African Futures Exchange – SAFEX for à equity index futures, single stocks futures, variance futures, dividend futures

Sydney Futures Exchange for à interest rates, equities, currencies and commodities

Tokyo Commodity Exchange TOCOM for à Gold Standard (1kg), Gold Mini (100g), Silver, Platinum Standard (500g), Platinum Mini (100g), Palladium, Aluminum, Gasoline, Kerosene, crude oil and Rubber.

Tokyo Financial Exchange – TFX for à Euroyen Futures, OverNight CallRate Futures, SpotNext RepoRate Futures

Tokyo Stock Exchange TSE for à JGB Futures and TOPIX Futures

 

More to come