Index futures are contracts to buy or sell a financial index at a set price today and settle on a date in the future.
These contracts were originally intended exclusively for institutional investors, but are now open to everyone.
Portfolio managers use index futures to hedge their stock positions against stock losses.
Speculators can also use index futures to bet on the direction of the market.
Some of the most popular index futures are stock based, including the E-mini S&P 500, E-mini Nasdaq-100 and E-mini Dow. International markets also have index futures.
Cash and carry arbitrage seeks to exploit pricing inefficiencies between the spot and futures markets for an asset by going long on the spot market and going short on the futures contract.
Heating Degree Day (HDD) measures the average number of days the temperature falls below 65 degrees Fahrenheit. At this temperature, heating systems are turned on in buildings to maintain an average temperature of 70 degrees.
Roll forward refers to extending a derivatives contract by closing a contract that is about to expire and opening another contract at the current market price for the same underlying asset with a closing date in the future.
Agribusiness is a combination of the words “agriculture” and “business” and refers to any business related to agriculture and commercial activities related to agriculture.
Documentary collection is a method of trade finance in which the exporter’s bank sends documents to the importer’s bank and receives payment for the shipped goods.
Futures contracts are financial derivatives that oblige the buyer to purchase some underlying asset (or the seller to sell that asset) at a predetermined price and date in the future.
centner (abbreviated as CWT) is a standard unit of weight or mass used in some commodity markets. It can also be used to determine the price of small batches of goods.