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This could be advantageous when (for example) a party expects to receive payment in foreign currency in the future, and wishes to guard against an unfavorable movement of the currency in the interval before payment is received.However, futures contracts also offer opportunities for speculation in that a trader who predicts that the price of an asset will move in a particular direction can contract to buy or sell it in the future at a price which (if the prediction is correct) will yield a profit.
The Chicago Board of Trade (CBOT) listed the first-ever standardized 'exchange traded' forward contracts in 1864, which were called futures contracts.
Clearing margin are financial safeguards to ensure that companies or corporations perform on their customers' open futures and options contracts.
Clearing margins are distinct from customer margins that individual buyers and sellers of futures and options contracts are required to deposit with brokers.
The predetermined price the parties agree to buy and sell the asset for is known as the forward price.
The specified time in the future -- which is when delivery and payment occur -- is known as the delivery date.