Variation Margin Definition Variation margin is a term used in financial futures trading to refer to the amount of money that is required to be paid or received by a trader to adjust their margin account based on changes in the value of the underlying asset. Variation margin is the … …
Benefits of Roll Forward Roll Forward is a powerful tool in the world of financial futures trading. It offers several benefits that can help traders maximize their profits and manage their risk effectively. 1. Flexibility One of the key benefits of Roll Forward is its flexibility. Traders have the option … …
Implied Rate: Definition, Calculation, Formula, and Example The implied rate is a financial term used to describe the interest rate that is implied by the price of a financial instrument, such as a bond or a futures contract. It is derived from the market price of the instrument and represents … …
What Are Heating Degree Days? Heating Degree Days (HDD) are a measure used in the field of energy consumption and weather forecasting. They provide valuable information about the amount of energy required to heat a building or space during a specific time period. When the average outdoor temperature is below … …
What is a Futures Commission Merchant (FCM)? A Futures Commission Merchant (FCM) is a financial institution or individual that acts as an intermediary between traders and the futures market. They play a crucial role in facilitating futures trading by providing a platform for traders to buy and sell futures contracts. … …
Definition and Explanation A commodity futures contract is a legally binding agreement to buy or sell a specific quantity of a commodity at a predetermined price on a future date. It is a standardized contract traded on a futures exchange, which acts as an intermediary between buyers and sellers. Commodity … …
Cash-and-Carry Arbitrage: Definition and Example In the world of financial futures trading, one strategy that traders often employ is called cash-and-carry arbitrage. This strategy involves taking advantage of price discrepancies between the spot market and the futures market to make a profit. What is Cash-and-Carry Arbitrage? Cash-and-carry arbitrage is a … …
Benefits of Investing in Bond Futures Diversification One of the primary benefits of investing in bond futures is diversification. Bond futures allow investors to gain exposure to a wide range of bond markets, including government bonds, corporate bonds, and municipal bonds. By diversifying their portfolio with bond futures, investors can … …