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Financial futures

Futures trading is spreading worldwide.

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A financial futures contract is an agreement to buy or sell, on an organised exchange, a standard quantity of a specific financial instrument or foreign currency at a future date. The price has to be between the two parties. Although contracts are traded between and seller on an exchange floor, these brokers do not have an obligation to each other, to a clearing house. This ensures that the futures market is free from credit to a large extent. Growth in futures trading has enormous since it in the United States in 1972. Financial futures have increasingly popular since then. Financial futures can traded by people willing to assume price risk and to profit from the rises or they expect to occur in interest rates or the share . Financial futures offer opportunities for the control of interest rate risk which are not possible in the cash market.



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