📝 One-liners · 65 cards
MNG FUTURES
What is a futures contract in the context of financial risk management?
A futures contract is a standardized, exchange-traded agreement to buy or sell an underlying asset at a predetermined price on a specified future date, used to hedge or speculate on price movements.
What is the minimum contract size typically specified in an exchange-traded futures contract?
Contract size is standardized and fixed by the exchange.
How does a futures contract differ from a forward contract?
Futures contracts are standardized and traded on recognized exchanges with daily mark-to-market settlement, while forward contracts are customized OTC agreements settled at maturity without daily margining.
What is the primary function of margin calls in futures markets?
Margin calls ensure traders maintain sufficient collateral in accounts.
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