Financial derivatives

label Cursuri autorenew 2025-09-29, 16:58 history_edu Filip Angela
The future contract is a standardized commitment between two partners, a buyer and a seller, to sell and, respectively, to buy a specific asset (foreign currencies, securities, other financial bonds, goods etc.) at a specific price established at the moment of concluding the transaction and the execution of the contract at a future date called maturity.

It’s a private commitment, concluded between two partners that know each other . It’s a standardised movable value by the market or the stockexchange which offer the respective contract.the buyer and the seller do not know each other. They know only the market where the transaction is being performed. The underlying assets, or the object of the contract can be any merchandise or any other financial instrument for which the two partners show interest.



The underlying asset is not anymore decided by the parteners that sign the contract. The underlying asset is decided by the stockexchange which offers the contract,this way the characteristics and the quality of the underlying asset are sure defined,in the main time,the levels of inferior quality accepted for underlying assets alike are established,as well as the price differences which are going to be calculated in the case when the standart underlying asset is not being delivered

The quantity that is going to be sold/bought, the price agreed and the maturity, are the elements of the future contract established taking into concideration the wishes of the two participants of the transaction.
The quantity of the underlying asset which is going to be delivered is established and standardised by the market that offers the contract.the maturity is also anounced ahead for this kind of contract. The price,though, is established using the demand/supply mechanism for the future contract for a specific underlying asset and influenced also by the maturity anounced for it.

No guaranties,or other sums of money are required at the moment of concluding such a contract.
In the moment of concluding the contract, i.e. the moment when the buyer or the seller takes its possition, they are asked to deposit a sum of money called margin or guaranty.