Business and Personal Finance Dictionary

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• FUTURES CONTRACTS
  
  Are instruments predicated on a cash commodity or currency, a financial instrument, or an index. These are standardized contracts which are traded on organized exchanges. Also, these contracts are subject to industry and exchange regulations and government regulatory bodies and laws. The standardization is one of the key factors which differentiates these instruments from forward contracts. Other factors are the standardization of margin or performance bond procedures and the high degree of anonymous offset. Futures contracts can be offset by a trade opposite to the initial transaction, and EFP, or a good delivery. Good deliveries can be satisfied by either the delivery of the actual commodity or financial instrument or by a final cash payment for Cash Settlement markets.
  
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