title = "Futures Contracts"

content = """
Futures contracts standardize agreements to buy or sell underlying assets at predetermined prices on future dates, providing essential tools for hedging, speculation, and price discovery across global commodities and financial markets.

**Contract Specifications:**
- **Underlying Assets**: Commodities (energy, metals, agriculture), financial instruments (stock indices, currencies, interest rates), and single stocks
- **Contract Size**: Standardized quantities (e.g., 1,000 barrels crude oil, 100 ounces gold, $100,000 face value bonds)
- **Expiration Months**: Quarterly cycles (March, June, September, December) plus additional months for active contracts
- **Tick Size**: Minimum price movement (e.g., 1 cent per bushel wheat, 0.01 index points)
- **Trading Hours**: Electronic and pit trading sessions across global time zones

**Pricing Mechanics:**
- **Settlement Price**: Daily mark-to-market value based on closing trades
- **Initial Margin**: Collateral deposit required to open positions
- **Maintenance Margin**: Minimum equity level requiring additional funds
- **Variation Margin**: Daily profit/loss settlements transferred between counterparties

**Trading Strategies:**
- **Hedging**: Farmers lock in crop prices, manufacturers secure input costs, investors protect portfolios
- **Speculation**: Traders profit from anticipated price movements without owning underlying assets
- **Arbitrage**: Exploit price discrepancies between related contracts or cash markets
- **Spread Trading**: Profit from price relationships between different contract months or related assets

**Market Structure:**
- **Clearing Houses**: Central counterparties guaranteeing contract performance through multilateral netting
- **Position Limits**: Maximum holdings preventing excessive concentration and market manipulation
- **Delivery Process**: Physical delivery or cash settlement depending on contract specifications
- **Convergence**: Futures prices approach spot prices as contracts approach expiration

**Index Futures:**
- **Stock Index Futures**: Track broad market performance (S&P 500, NASDAQ, Dow Jones)
- **Contract Multipliers**: Index value multiplied by dollar multiplier ($250 × S&P 500 level)
- **Fair Value**: Theoretical price accounting for dividends, interest rates, and time to expiration

**Currency Futures:**
- **Standard Contracts**: Major currency pairs with $100,000 notional values
- **Cross-Currency Relationships**: Arbitrage between related currency pairs
- **Interest Rate Differentials**: Impact pricing through carry trade dynamics

**Commodity Futures:**
- **Energy Markets**: Crude oil, natural gas, heating oil with global supply-demand dynamics
- **Metal Markets**: Gold, silver, copper influenced by industrial demand and geopolitical factors
- **Agricultural Markets**: Grains, livestock, soft commodities affected by weather and production cycles

**Risk Management:** Requires understanding leverage effects, margin calls, and position sizing to avoid catastrophic losses from adverse price movements.

Futures contracts provide essential risk management tools while offering sophisticated trading opportunities across diverse asset classes.
"""

version = "0.0.1"
