Authors:

Vasily A. TATYANNIKOV Cand. Sc. (Econ.), Professor of Financial Markets and Banking Dept.

Abstract:

The author rethinks the theoretical aspects of futures and forward contracts, as well as generalizes and justifies the nuances of their circulation in the derivatives market. A simplified interpretation of these derivatives shifts the emphases. Speculative operations with futures are often considered as investment ones, what diminishes the importance of their primary function – to hedge against adverse price changes in the capital market. The article identifies the distinctive features of futures and forward contracts and analyzes their role and technologies of circulation in the derivatives market. The paper highlights the risks that novice investors bear when carrying out operations with futures contracts and proves economic benefits of their use as a defence mechanism in unstable financial environment. The prospects for derivatives market development are examined. The author demonstrates the need to improve their circulation so that the positive impact on the country’s economy was noticeable and effective.

Keywords:

DERIVATIVE FINANCIAL INSTRUMENTS, CONTRACT, INITIAL MARGIN, VARIATION MARGIN, QUOTED PRICE, HEDGING

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For citation: Tatyannikov V.A. Futures contracts: modern peculiarities of circulation. Upravlenets – The Manager, 2017, no. 3(67), pp. 62–67.