The first futures transactions date back centuries, if not millennia. They have their origins in the raw materials and food trade. Since there were no forex trading at that time, the futures transactions evidently only took place over the counter. For this purpose, the buyer and seller agreed in advance on a price for a delivery and provided the services at a later point in time.
The buyer can thereby secure a fixed price for a later delivery of goods. The seller also has the assurance that his goods will be sold. This procedure was mainly used in the import-export business, as the delivery routes and storage costs had a considerable influence on the Forex Bonus‘ profits. Even today, of course, futures trading in raw materials and food still takes place. However, the field of forward transactions has changed significantly.
Definition of futures
In general terms, futures are all transactions in which the conditions that were specified when the contract was concluded must only be met at a later date. The delivery of the goods and the consideration, i.e. usually payment, therefore take place at a later point in time than the conclusion of the contract.
However, the quantity of goods and the purchase price are already determined when the contract is concluded. Forward transactions can be traded on the stock exchange, but of course they still take place in online trading today. Forward transactions on the stock exchange include various financial instruments, such as futures and options.
A distinction is also made between conditional and unconditional forward transactions.
- Unconditional forward transactions: Unconditional forward
transactions are contracts that oblige both contracting parties to perform their service on a specific date. The buyer must therefore pay at the agreed time and the seller is obliged to deliver. This is the case with futures or swaps, for example.
- Conditional futures:
In contrast to unconditional futures, the buyer has the choice of conditional futures whether he actually wants to carry out the transaction. Only the seller is obliged to provide his service if the buyer wants to carry out the forward transaction. In any case, the seller receives a Forex trading South Africa for this. The conditional forward transactions include the options.