What are the handover rates?

Forward rates are rates that the investor will pay for stocks or other security when purchasing futures contract. The buyer is now basically closing at the cost of buying commodities, currency, shares or other assets later. The buyer and the seller are committed to a legal subject to complete the sales transaction on a specific date in the future. The farmer can offer futures contract to the investor before the harvest. When the investor buys this contract, the investor locks the price, as well as the farmers. When the wheat is harvested later, the owner of the contract is obliged to buy wheat at the pre -term rate specified in the contract. These factors may include sellers' costs to keep ownership of the items to be sold, the expected recognition of the item and supply and demand. When the handover rates are offered, the buyer and the seller predict what will happen to the price of the asset sold. Conversely, if the asset prices fall, the seller will achieve a greater profit by selling assets by means of handover rates. As a result, participation in futureIt is sometimes known as hedging .

Futures is a legally binding agreement. The futures contract will be given both the rate and the price of the asset and usually includes the date of sale. The front rates are generally good only for a certain period of time. The investor must make a time frame to put forward in the contract.

futures contracts that report the handover rates must be met. However, Havmoznosti has a futures holder. If the buyer does not want to buy assets, the buyer can sell a contract to another investor. Futures contracts can be purchased and sold on most exchanges.

Futures contracts are most commonly used by large institutional investors. Individual investors can also participate in futures contracts. A small investor must be ready to fulfill the contract if it cannot be sold according to the date of sale in the contract. The buyer and seller must be readyAccept the price stated in the contract, no matter what happens to the commodity price before maturing the contract.