futures and forwards
Educational articles in this subcategory.
Using Futures for Equity Beta Exposure
# Using Futures for Equity Beta Exposure Equity index futures provide capital-efficient exposure to broad market movements. By posting margin rat...
Understanding Delivery Months and Symbols
# Understanding Delivery Months and Symbols Every futures contract has a unique symbol that identifies the underlying asset, delivery month, and ...
Tax Treatment of Section 1256 Contracts
# Tax Treatment of Section 1256 Contracts Section 1256 of the Internal Revenue Code provides special tax treatment for regulated futures contract...
Spread Margining Rules
# Spread Margining Rules Spread margining recognizes that offsetting futures positions have lower risk than outright positions. When you hold bot...
Seasonality Considerations in Futures Markets
# Seasonality Considerations in Futures Markets Many commodity futures exhibit predictable seasonal patterns driven by production cycles, weather...
Position Limits and Accountability Levels
# Position Limits and Accountability Levels Regulators and exchanges impose position limits to prevent excessive speculation and market manipulat...
Mark-to-Market Accounting Mechanics
# Mark-to-Market Accounting Mechanics Mark-to-market accounting recognizes gains and losses on futures positions daily, based on settlement price...
Margin Efficiency vs. ETFs or Swaps
# Margin Efficiency vs. ETFs or Swaps Futures, ETFs, and swaps all provide exposure to the same underlying markets, but with different capital re...
Interest Rate and Treasury Futures Primer
# Interest Rate and Treasury Futures Primer Interest rate and Treasury futures allow investors to gain or hedge exposure to interest rate movemen...
Initial and Variation Margin Process
# Initial and Variation Margin Process Margin is the financial safeguard that ensures futures contract performance. Initial margin is posted when...
Glossary: Futures Market Terms
# Glossary: Futures Market Terms This glossary provides concise definitions for futures market concepts, trading terms, and regulatory language. ...
Futures Contract Specifications and Standardization
# Futures Contract Specifications and Standardization Futures contracts are standardized agreements to buy or sell an asset at a predetermined pr...
Forward Contracts vs. Exchange-Traded Futures
# Forward Contracts vs. Exchange-Traded Futures Both forwards and futures obligate parties to buy or sell an asset at a future date, but their st...
Currency Futures for Hedging FX Risk
# Currency Futures for Hedging FX Risk Currency futures provide a standardized, exchange-traded method for hedging foreign exchange exposure. Unl...
Commodity Futures: Storage and Convenience Yield
# Commodity Futures: Storage and Convenience Yield Commodity futures pricing differs from financial futures because physical commodities incur st...
Cash vs. Physical Settlement Agreements
# Cash vs. Physical Settlement Agreements Futures contracts terminate through either cash settlement or physical delivery. Cash settlement involv...
Calendar Spreads and Roll Strategies
# Calendar Spreads and Roll Strategies Futures contracts expire, requiring traders with ongoing exposure to periodically roll positions from expi...
Block Trades and Exchange for Physical
# Block Trades and Exchange for Physical Large institutional orders can move markets significantly. Block trades and exchange for physical (EFP) ...
Basis Risk Between Futures and Spot
# Basis Risk Between Futures and Spot Basis risk is the risk that futures prices won't move in perfect lockstep with the asset being hedged. Unde...
Backtesting Futures Trading Systems
# Backtesting Futures Trading Systems Backtesting uses historical data to evaluate how a trading strategy would have performed. For futures, back...