support@edupristine.com1800 200 5835Request a Call
Call Me

FRM-1 Study Notes

Options(to be covered in detail in later slides)

  • Need of Futures Markets – To manage asset price risk (uncertainty of prices over time) of traders, merchants, dealers, farmers etc.
  • Futures Contract – An agreement between two parties, one to buy (long) and the other to sell (short), a fixed quantity and grade of an underlying asset at an agreed upon price on or before a given date in future.
  • Key characteristics of Futures:
    • The buyer of futures contract (long), contracts to receive delivery
    • The seller of futures contract (short), contracts to make delivery and accept payment
    • Futures contracts are tradable. Futures on same or similar commodities can be traded on more than one exchange
    • Futures contract can be terminated by an Offsetting
    • Futures contract can be settled by physical delivery or cash
  • Terms of futures contract (standardized by the exchange)
    • Underlying or spot – the underlying asset such as commodity, security, currency, index etc.
    • Contract size
    • Settlement mechanism – physical delivery or cash settlement
    • Delivery or Maturity date
    • Specific grade or quality

Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to and we will rectify it.

Popular Blogs: Whatsapp Revenue Model | CFA vs CPA | CMA vs CPA | ACCA vs CPA | CFA vs FRM

DM_marketing.php Post ID = 66021