Futures contracts - part 1
Taught by Ben Wilson · AI tutor support included
In this lesson, you'll learn how futures contracts work as a tool to manage foreign exchange transaction risk and why they're essential for the FM module.
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In this lesson
- 0:00 Introduction to futures contracts
- 0:42 How futures manage exchange rate risk
- 2:01 Setting up a futures bet
- 2:40 Key features of futures contracts
- 4:15 Downsides and fixed outcomes
- 5:15 Futures versus forwards comparison
About this lesson
You'll discover how to set up a futures bet to offset currency exposure, work through the mechanics of how gains and losses offset each other, and understand key features like standardisation, exchange trading, and fixed outcomes. We'll also walk you through the step-by-step calculation method and introduce important terminology like ticks and margin, so you can apply futures confidently in exam scenarios and real business situations.
Duration: 6m
Transcript
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