- Contracts to buy something in the future at a price agreed upon in advance. Futures first developed in the agriculture commodity markets, but often involve foreign exchange, Eurodollar deposits, and government bonds.
Related Terms and Acronyms
- Debt — Definition,
- Money one person or firm owes to another person or firm.
- Debt Issues — Definition,
- The issuance of bonds or other forms of debt on the public markets.
- Derivatives — Definition,
- Financial contracts whose value is derived from the value of some underlying asset, rate or index. Derivatives are used as risk-management tools by governments and corporations to reduce exposure to risk, mainly related to fluctuations in foreign-exchange and interest rates. Derivative instruments include swaps, options, futures and forward contracts and are used by banks in two principal activities: sales/trading and asset/liability management.
- Equity — Definition,
- Ownership in an asset.
- The value of a property minus outstanding mortgage debt and other liens.
- Issuer — Definition,
- A legal entity that develops, registers, and sells securities including stocks, bonds and derivatives.
- Secondary Market — Definition,
- A market where financial instruments such as stocks, bonds, options and futures are bought and sold to investors.
- Securities/Investment Dealer — Definition,
- One who acts as the agent for another party to buy and sell securities and other investments; also an underwriter.
- Security — Definition,
- Property designated as collateral.
- A document stating ownership of a stock or bond.
- A tradable financial implement that represents ownership, the rights to ownership or debt.