DerivativesClearing Margin Exposure Margin Interdelivery Spread Out-of-the-money European Options Convergence
Forward Contract
This type of contract is used to manage business risks, such as fluctuations in commodity prices or foreign currency exchange rates.
A forward contract is a legally binding agreement between two parties to conduct a trade at a predetermined price and quantity on a specified future date. Unlike other financial instruments, no money is exchanged at the time of signing the contract. This type of contract is commonly used to mitigate business risks associated with fluctuations in commodity prices or foreign currency exchange rates. It allows businesses to lock in a favorable price and quantity, providing stability and predictability in their operations.
Related terms
Understand the meaning and definition of Clearing Margin in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Exposure Margin in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Interdelivery Spread in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Out-of-the-money in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of European Options in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Convergence in the context of stock market, trading, and investments.
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