Sentences with phrase «future value of the underlying asset»

Contracts on the price of real estate include predictions of the future value of the underlying asset.

The futures contract rewards the party that makes the most accurate prediction of the future value of the underlying asset.

Not exact matches

For every investable asset — publically traded or otherwise — the underlying value of the asset is the sum of the discounted future cash flows, and risk comes from paying too high a price for those cash flows.

The value of a derivative depends on the value of its underlying asset, thus by predicting the future price of the asset, the future price of the derivative contract can be judged and traded on.

There are three main kinds of derivatives on the commodities market — contracts made between two or more parties who agree on the value of the underlying asset: futures and forwards, options and OTC products.

Investing in commodities indices that are constructed using long or short positions in futures on physical commodities whose value is determined based on the price of the underlying physical commodity plus yield and that trade on public markets that provide adequate liquidity and transparency, with negligible costs and no storage deterioration risk, offer a practical method to gaining commodities exposure and can provide a means for market participants to access the five components of the returns of the asset class.

Most often, derivatives involve some sort of futures the value of which will depend on the future movement of the underlying asset.

They derive their value from the value of an underlying asset or another financial instrument including futures contracts.

Stock index futures otherwise known as equity index futures are future contracts that use the value of an index as an underlying asset.

You are essentially betting on whether the value of an underlying asset is going to rise or fall in the future compared to what it was when the contract was taken out (or executed).

As some of Grayscale's previous fund can attest, the shares may trade at a substantial premium over the value of of the underlying asset if quoted on any secondary market in the future.