Lakshmishree What are derivatives ?
Lakshmishree What is the importance of derivatives ?
Lakshmishree Who are the operators in the derivatives market ?
Lakshmishree What are Forward contracts ?
Lakshmishree What are Futures ?
Lakshmishree What do you mean by Closing out contracts ?
Lakshmishree What is the concept of Basis ?
Lakshmishree What is the difference between Commodity and Financial Futures ?
The basic difference between commodity and financial Futures is the nature of the underlying instrument. In a commodity Futures, the underlying is a commodity which may be Wheat, Cotton, Pepper, Turmeric, corn, oats, soybeans, orange juice, crude oil, natural gas, gold, silver, pork-bellies etc. In a financial instrument, the underlying can be Treasuries, Bonds, Stocks, Stock-Index, Foreign Exchange, Euro-dollar deposits etc. As is evident, a financial Future is fairly standard and there are no quality issues while a commodity instrument, quality of the underlying matters.