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Futures and forwards contract
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Are price pre determined in both futures and forwards contract??I'm confused can anyone tell the difference between these 2
Answers (4)
Yes Both in futures and forwards, the agreement between the buyer and seller specifies the price at which they agree to buy and sell. In case of forward the transaction is executed between the parties on maturity date and in case of futures the profit or loss on daily price and agreed price is settled between the parties
Sriram Somayajula Admin
Yes Both in futures and forwards, the agreement between the buyer and seller specifies the price at which they agree to buy and sell. In case of forward the transaction is executed between the parties on maturity date and in case of futures the profit or loss on daily price and agreed price is settled between the parties
Sir in futures contract the price of contract will fluctuate daily?if yes why
Thread Starter
Dhakshana DhakshanaSir in futures contract the price of contract will fluctuate daily?if yes why
Yes it fluctuates daily. It fluctuates becuase it is traded in exchange Eg: You agree to buy 1 Kg of gold from me at 60 lacs on say 31st dec 20x1 Tomorrow morning say india bans all gold imports and there for any new contract entered into from this day onwards for delivery of gold on 31st dec 20x1 the gold price is not 60 lacs but 1 crore When there is a new information on subsequent days new contracts for delivery of gold on 31st de c 20x1 will trade at new price. Hence teh price of futures fluctuates with elapse of time based on new info
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