In international trade, today there are several markets, providing liquidity in various assets. On each of these markets given the opportunity to trade with all kinds of trading tools. If you seek information regarding the profitability and prospects of trade income to the resources of the Internet, you will find that most of the recommendations given in respect of assets in foreign trade.
However, the financial industry experts provide a more advanced concept in this regard. In fact, the foreign exchange market in international trade takes only a small share of the market. The majority of the assets falls on the commodity, the commodity markets and stock markets. In this aspect becomes relevant work with futures and options.
As futures and options contracts are a form allowing to acquire or to sell goods at an agreed price before. With regard to the definition of both instruments there is a difference.
Futures - is the kind of contractual agreement, according to which the buyer has the right to buy and the seller - to sell a particular commodity at a specified price at a specified time in the contract. But this agreement is the commitment of both sides to one another. That is, if the buyer agrees to accept a contract to purchase oil at a specified price within three months, he has no right to change his mind, even if the price of oil during this period will be cheaper.
Futures, as a form of contractual agreement may be concluded in relation to the various assets and for any period. The subject of purchase - sale may be any trading instrument from a huge list of commodity exchanges, foreign currency assets, commodities (oil, gas, ore). In addition, futures may provide an agreement on the agricultural markets in the purchase or sale of agricultural sector production - wheat, sugar, flour, coffee, cotton, wood products and so on. Another application is the futures market securities - asset here may be all kinds of stocks, stock indices the most developed economic areas, as well as debt securities.
When purchasing a futures contract under the agreement must be marked with some parameters bargain. Since, as mentioned above, futures are related literally to all markets, the contract necessarily dozhzhen be specified underlying asset that is the subject of the transaction. It can be as real goods and financial instruments trading. This is the first point, mandatory for the purchase of a futures contract. The second condition is the amount of goods.
As a rule, in futures trading there is a standardization system. In other words, there is a pre-established norms of goods or financial assets attributable to the one purchased futures. If the amount of one currency futures must be exactly $ 100 000, it will not be able to perform the operation with the amount of 180 thousand dollars. Perhaps in this case, a purchase contract with two equal size 100 000 dollars each. The same scheme is inherent in the markets and the rest of their assets.
Since this type of contractual agreement involves disciplinary rigor in financial transactions, and that the timing, there are also limitations to change the terms of the agreement. For example, the performance of the contract is possible only on the day after the contract of the treatment. Well, the fourth mandatory item - it is the presence of security guaranteeing the execution of the contract. The cost of the collateral is a futures contract is not stable, as fully dependent on the volatility of market assets. And so, as it will be charged as a percentage, that at the conclusion of each new contract may differ from its nominal value.
With regard to financial speculation, there is another opportunity to enter into transactions with lower requirements. To do this, there is options trading. The essence of option trading is that this type of contract gives the right to buy or sell a contract. Trading transactions in terms of the commitments are limited only by the rights of market participants on both sides. The option provides the only opportunity to participate in the transaction, but it does not require implementation.
Option contracts to some extent comparable with insurance policies, where in order to get a large sum in the event of force majeure have to pay the insurance premium in a small size. Exactly the same situation and with options. By purchasing an option, the buyer secures its insurance funds in the event of increase in the cost of goods. If at the time of the option exercise price falls, then it can partially offset by selling the option at a price lower. But if the price increases, the option holder is in a multiple winner.