there seems to be a demand for a ban on forward trading in some commodities. What is forward trading?
Tuesday, February 2nd, 2010 at
9:54 am
bgs_rao asked:
This question can perhaps be better answered by those who hve pecialised in trade and business. Others r also welcome tojoin this.
This question can perhaps be better answered by those who hve pecialised in trade and business. Others r also welcome tojoin this.
Tagged with: Commodities Trading • Trading Commodities
Filed under: Commodity Trading
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A forward or futures contract is an exchange traded contract that requires delivery of a commodity or a currency at a specified price and date. Unlike options, futures include an obligation to buy, which make them far more risky than options.
By the way, “Forward trading” means something completely different. It happens when a trader is taking a position in an equity in advance of an action which the trader knows his brokerage will take, that will move the equity’s price. For instance: a client wants to buy a large share in a stock and the trader buys 100 for himself too. That’s strictly illegal.