Futures
Futures are an agreement to sell an asset
- Cash-settled
Pricing
Futures are priced as S x ( 1 + r x t) - dividends S - spot r - risk free interest rate (5%) t - time to expiration
Margin
- Losses and gains are credited/debited daily
Futures are an agreement to sell an asset
Futures are priced as S x ( 1 + r x t) - dividends S - spot r - risk free interest rate (5%) t - time to expiration