8/9/20111Chapter 22Futures MarketsToday: Chapter 22 –Forwards and FuturesThursday: Study DayliffiOnline Office HoursWednesday:4:30 – 4:30 pm EST, 7:00 – 7:45 pm ESTThursday:10:00 – 11:00 pm ESTFutures MarketsThe futures contract calls for delivery of a commodity at a specified delivery or maturity date, for an agreed-upon price (futures price), to be paid at contract maturity. The futures price is set such that the contract has an initial value of $0.
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8/9/20112Futures MarketsForward and Futures MarketsForward ContractFutures ContractPrivate contract between two partiesTraded on an exchangeNot standardizedStandardized contractUsually one specified delivery dateRange of delivery datesSettled at end of contractSettled daily (Marking-to-market)Delivery or final cash settlement usually takes placeContract is usually closed out prior to