. A futures contract is a legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. Futures contracts are standardized for quality and quantity to facilitate trading on a futures exchange. The buyer of a futures contract is taking on the obligation to buy the underlying asset when the futures contract expires. The seller of the futures contract is taking on the obligation to provide the underlying asset at the expiration date.
. The payment and delivery of the asset(Car) is made on the future date termed as delivery date. The buyer in the futures contract is known as to hold a long position or simply long. The seller in the futures contracts is said to be having short position or simply short.
. The underlying asset(car) in a futures contract could be commodities, stocks, currencies, interest rates and bond. The futures contract is held at a recognized stock exchange. The exchange acts as mediator and facilitator between the parties. In the beginning both the parties are required by the exchange to put beforehand a nominal account as part of contract known as the margin.
. Since the futures prices are bound to change every day, the differences in prices are settled on daily basis from the margin. If the margin is used up, the contractee has to replenish the margin back in the account. This process is called marking to market. Thus, on the day of delivery it is only the spot price that is used to decide the difference as all other differences had been previously settled.
. Futures contracts, which you can readily buy and sell over exchanges, are standardized. Each futures contract will typically specify all the different contract parameters:
If you are getting involved in trading futures, you have to be careful, because you don’t want to have to take physical delivery. Most casual traders do not want to find themselves obligated to sign for receipt of a trainload of swine when the contract expires and then figure out what to do with it.
. There are two kinds of futures traders: hedgers and speculators. Hedgers do not usually seek a profit by trading commodities futures but rather seek to stabilize the revenues or costs of their business operations. Their gains or losses are usually offset to some degree by a corresponding loss or gain in the market for the underlying physical commodity.
. For example, if you plan to grow 500 bushels of wheat next year, you could either grow the wheat and then sell it for whatever the price is when you harvest it, or you could lock in a price now by selling a futures contract that obligates you to sell 500 bushels of wheat after the harvest for a fixed price. By locking in the price now, you eliminate the risk of falling wheat prices. On the other hand, if the season is terrible and the supply of wheat falls, prices will probably rise later -- but you will get only what your contract entitled you to. If you are a bread manufacturer, you might want to purchase a wheat futures contract to lock in prices and control your costs. However, you might end up overpaying or (hopefully) underpaying for the wheat depending on where prices actually are when you take delivery of the wheat.
. Some references of future contract are mentioned below.
Please write the future contract of car company. (300 words ) Citations and references need
1. Pls write advantages and disadvantages of Forward contract method related with Audi company . (150 words ) 2. Please write advantage and disadvantages of Swap contract method related with Toyota company .( 150 words ) 3. Please write advantage and disadvantages of options contract method related with Honda company .(150 words ) Please use information form Google Citations need for each paragraph References need
Question 1. Pls write advantages and disadvantages of Forward contract method related with Audi company . (150 words ) Question 2. Please write advantage and disadvantages of Swap contract method related with Toyota company .( 150 words ) Question 3. Please write advantage and disadvantages of options contract method related with Honda company .(150 words ) Note - Please use information form Google -Citations need for each paragraph -References need
Please write and paraphrase ‘ Advantages and Disadvantages of Swaps
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Use information from Google source
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Aab automa Head 2017, p. 12). (2) (a) Critical evaluation of method (A) Currency swaps Currency swaps are generally used to access a cheaper source of financing in the desired foreign currency without having to access foreign capital markets. A higher cost of debt for a...
Which car company use which contract method? 1. Forward contact 2. Future contract 3.Options contract 4. Money market contract Please Match with below car company 1. Toyota 2. Nissan 3.BMW 4. Suzuki 5.Honda 6.KIA 7. Ford Simple Ans -1 Toyota use Swap contract method
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write ˜ Advantages and Disadvantages of Swaps contract method .
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Some apps could automatically update Heading 2 Tide ubde Emph. No Spacing Heading1 (2) (a) Critical evaluation of method (A)- Currency swaps Currency swaps are generally used to access a cheaper source of financing in the desired foreign currency without having to access...
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