Basic knowledge of futures (variety, price, delivery time.etc)

Underlying derivatives
Knowledge point 1: Long term

1. Definition
– A forward contract refers to a contract in which both parties agree to buy or sell a certain amount of an underlying asset at a certain price at a   certain time in the future;
– Generally speaking, the two parties agree to determine the terms of the contract. The contract terms are tailor-made for the buyer and seller and meet the special requirements of both parties. They are usually reached through over-the-counter transactions (OTC).

2. Common forward transactions include
– Commodity forward trading
– Forward Rate (FRA)
– Foreign exchange forward transactions
– Non-deliverable foreign exchange forwards (NDF)
– Forward stock contract

3. The difference between forward contract transactions and spot transactions
– In spot trading, after the two parties reach an agreement on the price and quantity of the trading assets, they usually deliver the money and assets immediately or within an agreed few days. The corresponding price is called the spot price;
– The essence of a forward contract is to determine the rights and obligations of both parties in future transactions in the form of a commercial contract. At a determined time in the future, regardless of pros and cons, both parties have the rights and obligations to complete the transaction according to the contract.