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How Traders Measure Liquidity

David Lerman, Senior Director of Education at CME Group

By Dave Lerman The investment community usually defines a liquid investment as something that can be easily turned into cash. Selling a house is an example of an illiquid investment.  It could take weeks or months to close on the transaction and receive your money.  Stocks, however, tend to be very liquid because they can ...

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History of Futures Trading

futures trading

History of Futures Trading The first recorded instance of futures trading occurred with rice in 17th Century Japan, there is some evidence that there may also have been rice futures traded in China as long as 6,000 years ago. Futures trading is a natural outgrowth of the problems of maintaining ...

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Futures contracts vs. Forward contracts

FUTURES VS FORWARDS

Futures contracts vs. Forward contracts A futures contract,  often referred to as futures, is a standardized version of a forward contract that is publicly traded on a futures exchange (CME, LME etc.). Like a forward contract, a futures contract includes an agreed upon price and time in the future to ...

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Derivative instruments

Contracts such as options and futures whose price is derived from the price of the underlying financial asset.

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