From the lecture, I understand that we’re not allowed to make future deals on the amount (800,000 pounds) we wish to. Why is that? Is it a rule from a dealer or what?
The lecture was great, but I am failing to understand why would any financial manager opt for a futures contract to hedge and not go for a forward contract instead since futures require a high degree of speculation? What makes futures more preferable?
With forward contracts you have to stick to a fixed date – if the transaction ends up happening earlier or later, then there is a problem.
With futures, you can close the deal at any time (up to the end of the future) and you are therefore not stuck with a fixed date.
(I don’t know why you say a ‘high degree of speculation’. The amount is not going to be completely fixed using futures, but it is nearly fixed and is certainly not speculating when used to hedge against risk.)
Dear John,
There is only one thing I may say. THANK YOU for such amazing lectures !!!! Enjoyed your F5 lectures, now enjoying P4 !!!!!!
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Sir,
From the lecture, I understand that we’re not allowed to make future deals on the amount (800,000 pounds) we wish to. Why is that? Is it a rule from a dealer or what?
Thank you.
The futures exchange sets the contract size – it makes the trading more efficient. In exam questions you are always told what the contract size is.
The lecture was great, but I am failing to understand why would any financial manager opt for a futures contract to hedge and not go for a forward contract instead since futures require a high degree of speculation? What makes futures more preferable?
I do actually explain this in the lectures.
With forward contracts you have to stick to a fixed date – if the transaction ends up happening earlier or later, then there is a problem.
With futures, you can close the deal at any time (up to the end of the future) and you are therefore not stuck with a fixed date.
(I don’t know why you say a ‘high degree of speculation’. The amount is not going to be completely fixed using futures, but it is nearly fixed and is certainly not speculating when used to hedge against risk.)
Thank you, John, I have just watched Currency Futures 3b lecture and understood the reason. Your videos are great. God bless!
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this very good lecture helpfull thanks
Thanks a lot, I hope all ACCA students will find your site!
Students need to spread the word! 馃檪
I am! 馃榾
thank you 馃檪
woowww what a lecture…gradually gradually am getting it!!! thumbs up Sir
Really a nice lecture
Rally a nice leature
Wonderful lecture. God bless
finnally iam catchin on fast, waiting for introduction of challenges. Iot cant all go this smoothly in the exams.
Ah . .such a relief after understanding the futures after a long struggle . thanks for the lecture
very helpful but 1b isn’t work
sorry browser Prob
EXCELLENT! Beautifully explained!! 馃檪
excellent
thankyou so much
Wonderful lectures!Really thank you!
very wonderful
used to view this lessons well but now failing
It is really helpful. It is really amazing that the concepts are explained so well that it seem to be very easy to grasp
This lecture can not play.Can we have lectures on Mergers and acquisitions as well.
Otherwise your lectures are very helpful.
Thank you for all this lectures! Extremely useful!!!