Derivatives market
The futures market is the economic place, meet at the supply and demand for futures contracts. It forms the complement to the cash or spot market.
Broad
The completed on the futures transactions shall be fulfilled in an agreed period of time must be at least three trading days occur after the transaction, both sides by the contractor. This distinguishes the derivatives from the spot market, where spot transactions are to be fulfilled on both sides after two trading days. Article 38 paragraph 2 of the EU Regulation of 10 August 2006 ( 1287/2006 ) speaks of a forward contract, if regardless of its explicit terms of an agreement between the parties is to the effect that the delivery of the Underlying is suspended over two trading days ahead. Decisive for the assignment to the futures market is thus the mutual fulfillment of the business shifted to a more than two trading days out of time.
Commercial properties in the forward markets are currencies, securities, metals or other fungible items in the form of standardized contracts for future settled financial instruments qualifying as derivative instruments (or short: derivatives) are designated. The price for the trade item ( "Underlying") to which a contract relates to the derivatives market is already determined at the time the contract is concluded and is independent of the incoming during the term of the forward contract prices.
Functions
Futures markets are among the most promising markets, complementing the spot or cash markets. Futures markets exist because economic uncertainties are unavoidable, future economic developments are not entirely predictable and people develop different expectations even with the same public knowledge. In the foreign exchange market is to be observed that the forward exchange rate usually differs from the spot rate, because a rate differential between the currencies traded is and / or expectations of the market participants are pricing in about future on - or devaluations of the currencies concerned. In the forward market expectations of market participants act on data changes from intense than the spot market because the period is greater to the settlement of transactions and this is accompanied by a higher probability of data changes.
Risks
The specific risk of futures and thus the risk on the futures market is that - unlike cash transactions where the investor must use immediate cash assets or a loan amount - by a deferred settlement date to speculate on a reasonable, but uncertain development of the market price in mislead the future, which will allow the resolution of the forward commitment without the use of its own assets and without taking out a loan through a profitable closeout business. Typically, with options and futures transactions, the risks of leverage and the total loss of the invested capital and the risk of having to use additional plan unconstitutional means, connected. Therefore, it is investment services company in accordance with § 26 Section 1 of the Stock Exchange Act prohibited to enter into contracts with persons who are not familiar with the matter. The Exchange Act meant by stock market speculation shops in particular the purchase and sale transactions with out -pushed delivery time, even if they are completed over the counter ( § 26 paragraph 2 of the Exchange Act ) and options thereon, if they are focused on profit.
In particular, on the futures markets operate market participants to the effective accomplishment of the above reasons - are not interested, but during the term of the forward contract schedule a closing for the purpose of profit-making - such as delivery of the goods to be purchased, securities or currencies.
Others
Futures markets provide the savvy investor numerous additional investment alternatives that can be adapted to the personal market expectations and the psyche, but in particular to individual risk tolerance.
Be completed continuously institutionalized for a predefined typed collection of objects trading on the futures market contracts in standardized form, we speak of futures exchanges. The derivatives exchange Eurex is the world market leader in the trading of futures and options.