Futures Contract

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On the Sydney Futures Exchange the price of a 3 yr commonwealth treasury bond futures contract is quoted at 94.25. What is that suppose to mean?? why is it quoted lik that?

Best Answer

That's the price u can buy the 3 yr commonwealth treasury bond futures contract. More specifically is this for the Dec 07 contract or the Mar 08 contract?

If you buy a put option on a $100,000 Treasury bond futures contract with an exercise price of 95 and the price of the Treasury bond is 120 at expiration, is the contract in the money, out of the money, or at the money? What is your profit or loss on the contract if the premium was $4000

Best Answer

depends when you sale either 4k lose or 21k gain!!!

In the forex spot market spreads can range from 1.5 to 5 pips, what are they on the futures? For example the USD futures contract? Where can I find the bid/ask for futures contracts?

Best Answer

Currenices on the CME Globex during the day is usually only 1 tick for the majors (Eur, Gbp, JPY, CHF) Overnight I have seen them as wide as 3 ticks. As far as I know, you need a brokerage account with Globex access to get bid/ask. I am unaware of free site that gives bid/ask.

'forward contract' , 'futures contract', options

Best Answer

Forward contract-It is an agreement to deliver a financial instrument.It is very specific in terms of parties involved,date of delivery and the quantatity.No claring corporation is involved.There is high risk of both parties deffering the contract Futures contract- Itis very standardised contact,transaction occurs through exchanges,parties are not directly involved,no risk of party deffering contract since clearing corporatins take care of payments Options-It is right to buy(or sell) a stock at a particular price For examples if you think that price of sharesof Tata steel go upwards (current price Rs 700) ,you can buy Tata steel call option with a strike price of 700. when stock goes up (to Rs 720),you can exercise your right(option) to buy at 700.This means that you are buying a stock at lower price than the market price and to that extent you will be profited

Would be the amount that you put into the futures contract or would it be more?

Best Answer

Assuming that you are long the futures, you can lose as much as the fully funded value of the contract. So if you are trading mini s&p's (which are $50 per point) and the current price is 1500, a 100% drop in the s&p would equate to a loss of 1500 X $50, or $75,000. Now futures only require you to put up a small amount of money to trade them (roughly $2k for the mini s&p) so on your 2k investment, you could lose up to $75,000. However it is pretty unlikely that the s&p will drop 100%. If you are short the futures contract, the potential loss is unlimited as you never know how high the price will go.