What are the basic types of DS contracts?

  • Forward contract: An agreement between the buyer and the seller about the transfer of an asset at a certain point in the future at a pre-determined price at the date of execution of the contract.
  • Futures contract (FC): This is a form of forward contract, but the contents relating to the underlying assets, method and time of transaction - clearing - payment ... have been approved and agreed on the contract form by the "Standardization" governing body. Futures contracts are listed and traded on the Derivatives Exchange
  • Option Contract: A financial agreement whereby a party has the right to demand execution and the other party has the obligation to purchase or sell a quantity of the underlying asset at a predetermined price for a period of time or at a certain time in the future. Option contracts can be traded in OTC and centralized markets
  • Swap Contract: A swap contract is a financial agreement whereby one party commits to swap a financial instrument's cash flow with the rest of the financial instrument's cash flow over a specified period of time.