Financial future
Financial future
Financial Future
Financial future.
When a futures contract is linked to a financial product, such as a stock index, Treasury notes, or a currency, the contract is described as a financial future.
In most cases, the hedgers who use financial futures contracts are banks and other financial institutions that want to protect their portfolios against sudden changes in value.
The changing prices of a financial futures contract reflect the perception that investors have of what may happen to the market value of the underlying instrument.
For example, the price of a contract on Treasury notes changes in anticipation of a change in interest rates. Expected increases in the rate produce falling contract prices, while anticipated drops in the rate produce rising contract prices.