What are futures at the Treasury?
Futures are derivative tools that commit the parties to the contract to either buy or sell the basic asset for a particular day at a certain price. The basic assets on which Futures are based on the cash register bonds is the bond of the United States Treasury, a type of debt instrument issued by the Ministry of Finance. These tools allow investors to protect themselves from interest rate volatility. The bond of the Ministry of Finance is one of several types of debt instruments issued by the Ministry of Finance of the United States, which generate revenue for the Ministry of Finance in exchange for payments that they must provide to investors later. The products of the Ministry of Finance are called various names according to their maturity and frequencies with which the coupons pay the investor. The bond is valid every six months and its maturity date is 30 years after its Issue.
After World War II with representatives at summiThe Bretton Woods agreed on a system of fixed exchange rates. The system gradually collapsed and in 1971 President Richard Nixon removed the dollar from the gold standard. This action led to the volatility of exchange rates and interest rates. These fluctuations made it difficult for investors to decide on long -term investments, as the cost of possessing money in certain types of investments has been constantly changing. The first future of the Ministry of Finance was created by the Chicago Board of Trade in 1975 to respond to volatility.
Investors can buy or sell futures for cash bonds in combination with other assets to create a secured portfolio. This means that the investor is protected against changes in interest rates that could affect his expected income from his investment. The tools can also be used to lock future pricepooks by investors that the conditions in the future would be unfavorable compared to the market expectations that are reflected in futures prices. Some investors simply tradeon the Futures market and tries to make money by trading with futures contracts with different basic assets of each other.
Futures cashier bonds are particularly useful for investors because they are highly liquid. This means that the secondary market on which investors are already trading written futures contracts has a high volume of trading. Investors can count on the sale or purchase of contracts in a short time. Liquidity allows investors to plan strategies and perform them without interrupting the waiting for finding the buyer or seller.