📚 node [[financial solutions futures and forwards]]

Financial Solutions - Futures and Forwards

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Locking in Future Commodity Prices

  • Futures Contracts
  • Forward Agreements

Futures Contracts

On an exchange and standardised

  • NYMEX
  • COMEX

Futures are settled on a daily basis, which has cashflow implications

Forward Agreements

Off exchange and customised

Not settled on a daily basis.

Different commodities to the usual ones. Customised factor is the biggest issue.

Contracts that obligate a buyer to buy an assett or a seller to sell an assett at a set price at a future time

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