The securities whose values are derived from available under line securities.
- Forward Contracts
- Future Contracts
- Optional Contracts
Forward Contracts:
A contract in which the prices of the commodities and assets decided today and transaction will take place in future at specified rate.
Future Contracts:
A contract in which the prices of the commodities and assets decided today and transaction will take place in future at specified rate.
Difference between forward and future contracts
Forward contract Future contract
- Not standard Standardized
- Over the counter market Standardized market
- No advanced payment Advanced payment
- Unsecure Secure
Optional Contracts:
Optional contract is a financial instrument in which the person have right to purchase and sell commodities and securities.
