Protection against Counter Party Risk: The marketplace is protected against counter-party
risk by the exchanges and clearing firms.
The exchanges and the exchange’s clearing
members, known as Futures Commission Merchants (FCM), guard against default through
the exchange’s clearing house.
Regulated marketplaces: In the United States, Futures marketplaces are regulated by the
U.S. Government through the Commodity Futures Trading Commission and the industry’s
Self Regulatory Organization, the National Futures Association. They regulate and monitor marketplace integrity and member professional conduct.
Standardized contract terms: Each December 2006 Gold Futures contract is identical to
every other December 2006 Gold Futures contract in:
- Size
- Grade or quality
- Expiration or delivery date
- Designated delivery points and methods.
This supports the ease of exit and entry for positions.
Access to price discovery: Getting into and out of positions is as simple as calling your broker
and asking to put your position on or take it off.
*
Futures contracts are offered in specific delivery contracts months.
* Options are offered in all serial months.
Support evaluation and duplication of strategies: Standardized futures contracts allow you
to implement and evaluate a strategy that can be flexible and can be duplicated in your
business model.
* There are marketplace conditions that may preclude market participants from exiting or
entering positions in a timely manner.
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