Management and Organizational Studies 1023A/B Chapter Notes - Chapter 10-12: Forward Market, Shortage

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Barry Hawn

Document Summary

Spot or cash market: price refers to item available for immediate delivery. Forward market: price refers to item available for delayed delivery. Future market: sets features (contract size, delivery date, and conditions) for delivery. An obligation to buy or sell a ixed amount of an asset on a speciied future date at a price set today. Centralized marketplace allows investors to trade with each other. Financials: foreign currencies as well as debt and equity instruments. Organized marketplaces where established rules govern conduct: financed by membership dues and fees for services rendered. Members trade for self or for others. A corporation separate from, but associated with, each exchange. Exchange members must be members or pay a member for these services: buyers and sellers settle with clearing corporation, not with each other. Like options, futures trading is a zero-sum game. Good faith deposit made by both buyer and seller to ensure completion of the contract: not an amount borrowed from broker.