Options and FuturesFutures Commission Merchant Market Reporter Floor Trader Close Supply, Law of Futures Commission Merchant (FCM)
Premium (futures)
Futures contracts, also known as derivatives, are agreements between buyers and sellers to exchange a specific asset at a predetermined price and date in the future. The difference between the contract price and the current market price is known as the basis. When trading futures options, the buyer pays a premium to the seller for the right to purchase or sell the underlying asset at a specific price. It's important to note that the buyer pays the premium, while the seller receives it. Understanding these terms is crucial in navigating the world of finance and investing.
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