Understanding Futures Contracts
Futures contracts are a great way to buy or sell something at a predetermined price for delivery in the future, with the first contracts having been negotiated for agricultural products.Formula
The initial margin amount plus any additional margin amounts minus the settlement price multiplied by the contract sizeHow do I calculate the futures contract?
It is important to understand how to calculate Futures contracts as they are a major component of the financial markets. The best way to calculate Futures contracts is to use a spreadsheet program such as Sourcetable as they provide a standardized way to calculate these contracts. The formula to calculate a Futures contract is the initial margin amount plus any additional margin amounts minus the settlement price multiplied by the contract size. This will give you the total margin amount for the Futures contract.
What are Futures Contracts?
Futures contracts are derivatives that track an underlying virtual asset, often cryptocurrency. They have a fixed expiry date and use a regular payment mechanism between the counterparties.
How often are payments made on Futures Contracts?
Payments on Futures contracts are made every 1 hour.
What are the main components of a Futures Contract?
The main components of a Futures Contract are the underlying virtual asset, the fixed expiry date, and the regular payment mechanism between the counterparties.
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Key Points
How do I calculate futures contract?
The initial margin amount plus any additional margin amounts minus the settlement price multiplied by the contract size
Underlying Assets Obligate Buyer
Futures contracts are agreements between two parties to buy or sell an underlying asset at a predetermined price on a set date in the future. The buyer of the contract is obligated to purchase the underlying asset when the contract expires.
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