BQLearning - F&O Series: What Is A Futures Contract?
BQLearning is a special show that seeks to demystify financial markets, economic theories, legal processes and political structures.
In this series we explain how the most commonly used derivatives - futures and options, work in equity markets, the advantages they offer and the risks associated with them.
In order for an exchange to standardise and facilitate trade of futures contracts, it needs to do the following:
- Determine the size of contract
- The date of settlement of the contract
- The advance sum expected from parties trading in the instrument
The price is the one agreed upon by participants involved in the transaction.
This video explains how these components come together to make a futures contract.