Talk:Futures contract

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Proposed changes to intro[edit]

I wonder if the following change to the first sentence would be helpful:

In finance, a futures contract is a standardized contract between two parties to buy or sell a specified asset of standardized quantity and quality for a price agreed today (the futures price or the strike price) with delivery occurring at a specified future date, the delivery date.

to

In finance, a futures contract is a standardized contract between two parties to buy or sell a specified asset of standardized quantity and quality for a price agreed today (the futures price or the strike price) with delivery and payment occurring at a specified future date, the delivery date.

It took me a while to figure out from the article that nobody pays for a futures contract (the hint was in the "Definition of futures contract" section, where they say "The price of entering a futures contract is equal to zero.") That was the crucial thing I was missing, so maybe it might help other readers to alert them of this fact already in the first sentence.

Also, the

The contracts are traded on a futures exchange.

was confusing to me, since it seemed to imply that these contracts themselves have a price and can be bought and sold at a futures exchange, but I couldn't figure out what it would mean that person C buys a contract entered into between persons A and B. Maybe instead

The contracts are negotiated at a futures exchange, which acts as an intermediary between the two parties.

Cheers, AxelBoldt (talk) 15:32, 28 May 2012 (UTC)

there was a tag asking for more context (which I've tried to provide) and complaining about the length of the intro. IMO the intro was too short rather than too long. Anyway, what I've done can be edited if anyone feels strongly Chrismorey (talk) 03:28, 25 February 2015 (UTC)

Futures vs forwards[edit]

The article currently defines forwards like this: "A closely related contract is a forward contract. A forward is like a futures in that it specifies the exchange of goods for a specified price at a specified future date. However, a forward is not traded on an exchange and thus does not have the interim partial payments due to marking to market. Nor is the contract standardized, as on the exchange."

This is quite incorrect and should be fixed. The proper definition is only that a forward contract is the same sort of contract as a futures contract, but without the daily MtM settlement. Both contracts may be listed at an exchange. For instance, NASDAQ OMX Commodities list both futures and forwards in the Nordic power market.

There is a good reason most futures contracts are exchange traded and most forwards are not. That reason is that the daily MtM is somewhat complicated but significantly reduces risks for the clearing house. Since the clearing house can offset the administrative burden of the MtM on thousands or even millions of positions, the advantages are much higher. In contrast, for a bilateral contract, a daily MtM may be completely unworkable for practical reasons and a forward may be preferable. But that has nothing to do with the definitions of what a futures contract or a forward contract actually is. — Preceding unsigned comment added by 91.212.207.4 (talk) 10:49, 6 February 2013 (UTC)

Or put another way a futures contract is a special type of forwards contract which because it is in an agreed standard format can be easily traded. -- PBS (talk) 18:12, 9 November 2015 (UTC)

External links modified[edit]

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Addition to external links section[edit]

I've made an addition to the external links section.The addition being the link titled 'Financial Derivatives:Futures - The Big Picture Simply Explained' - links to a non-commercial informative site whose linked content is relevant to this topic and expounds it. It's in keeping with the standard maintained by existing external links and in accordance with Wikipedia guidelines. Request fellow wikipedians to verify the change made.Bsk11 (talk) 12:42, 23 September 2017 (UTC)

You have spammed that into several articles. No thanks. Jytdog (talk) 02:52, 24 September 2017 (UTC)

Hello Jytdog (talk), I'm new to Wikipedia editing and had initially added that link to other similar articles pertaining to this topic. The other links have already been deleted and I have no intention of adding the link to other than this topic, so consider that. Request you to read the article content provided at the link provided before simply treating a new link as spam.

Also consider that content in context with the content redirects made by other 'Existing External Links' for this topic (for their relevance to the topic) i.e- CME Group futures contracts product codes ; Futures Data - free, historical data in CSV, Excel, JSON or XML format ; Futures Contract Specifications and Tick Values at ExcelTradingModels.com ; Real-Time Stock Indices Futures at Investing.com

Regards Bsk11 (talk) 04:48, 24 September 2017 (UTC)

Thanks for pointing out the other spammy links. I have removed them too. Jytdog (talk) 05:01, 24 September 2017 (UTC)

Hi Jtydog, Thank you for removing the spammy links - this is not just the case with this wiki topic but with several other articles that I've gone through (haven't kept a record of those links) < the one link that you have not removed is also not functioning properly and the web-page displays an error>

Have you read the article that the link I added pointed to? - if so you would have noted that it isn't spam, on the contrary very relevant to the concerned topic. Request you to re-add the link or justify why you think it is spam. Regards Bsk11 (talk) 07:21, 24 September 2017 (UTC)

see your talk page. Jytdog (talk) 18:33, 24 September 2017 (UTC)

Link to an external website[edit]


A user. Bsk11 would like to include a link to a website they own, with content they wrote, as an external link in this article. (disclosure is here)

Here is the link:

What do folks think? Jytdog (talk) 03:59, 26 September 2017 (UTC)

  • There's little to qualify the reputability of the author or the site. Just my two cents Sean.Bernard (talk) 13:02, 26 September 2017 (UTC)
  • Oppose. This is a blog. We don't link to blogs, generally, unless the author is a recognized expert in the field. In this case, the author is anonymous and unidentifiable; no byline, no description, no name, nothing. The articles make no citations to anything, and the content is the sort that's available in other sources Wikipedia would consider reliable. I cannot see the value that this link would add to the article. ~Anachronist (talk) 21:25, 26 September 2017 (UTC)