FUTURES

Futures or forward transactions - contracts creating a commitment to buy or sell a specified amount of merchandise or financial instruments on a given date at a predetermind price. The purchased future contracts are discharged through reverse transactions up to the execution date, and there is no actual acquisition of assets.

The main advantage of futures contracts is the possibility to guard against future price/interest rate fluctuations, caused by a variety of factors affecting the markets.

To execute the transaction a it is necessary to put down a security deposit, which serves as a guarantee for the completion of the transaction. The size of the deposit is determined by the future- traded asset.