In many commodities markets, it is very helpful for buyers or sellers to lock-in future prices. This is what both forwards and futures allow for. This tutorial explains how they work and what the difference is between the two.
- Forward Contract Introduction
- Futures Introduction
- Motivation for the Futures Exchange
- Futures Margin Mechanics
- Verifying Hedge with Futures Margin Mechanics
- Futures and Forward Curves
- Contango from Trader Perspective
- Severe Contango Generally Bearish
- Backwardation Bullish or Bearish
- Futures Curves II
- Contango
- Backwardation
- Contango and Backwardation Review
- Upper Bound on Forward Settlement Price
- Lower Bound on Forward Settlement Price
- Arbitraging Futures Contract
- Arbitraging Futures Contracts II
- Futures Fair Value in the Pre-Market
- Interpreting Futures Fair Value in the PreMarket
Source: Khan Academy