Exchanging contracts end trading mechanism on futures markets in Romania

• Author: Gabriela Bologa - Maria Rosca (Agape)
• Position: AGORA University, Oradea. Faculty of Law and Economics
• Pages: 12-18

12

EXCHANGING CONTRACTS END TRADING MECHANISM

ON FUTURES MARKETS IN ROMANIA

Candidate to Ph.D Lecturer Gabriela Bologa

AGORA University, Oradea

gabriela_bologa@univagora.ro

Student Maria (Agape) Roşca

AGORA University, Oradea

Faculty of Law and Economics

maria_rosca@yahoo.com

Abstract:

The ample and unanticipated oscillations of prices on the spot markets,

together with the limited power of the participants on these markets, were

favorable factors to the apparition of forward and futures transactions. The

mechanism of transaction on the futures markets is being realized in special spaces

arranged for this activity, places called rings or pits. The base rule on futures

markets is to buy at low cost and to sell at high price, no matter in what order.

Since their apparition, stock exchanges gained a special attention from the

public, representing a hope for a quick enrichment, and the solution in searching a

security for the near or distant future. The process of un materializing as the

materials was the first step towards futures transactions. Facilitating the

ascertainment of goods contributed to the development of active capital.

Key words: spot contract, forward contract, futures contract.

I. Exchanging contracts

Since their apparition, stock exchanges gained a special attention from the

public, representing a hope for a quick enrichment, and the solution in searching a

security for the near or distant future. The process of un materializing as the

materials was the first step towards futures transactions. Facilitating the

ascertainment of goods contributed to the development of active capital.

The ample and unanticipated oscillations of prices on the spot markets, together

with the limited power of the participants on these markets, there were favorable

factors to the apparition of forward and futures transactions.

• The spot contract – its object is present merchandise, that exists at this point

of closing a contract and that is going to be delivered and paid immediately.

• The forward contract – it is private agreements to buy or to sell, to deliver

or to pay at a certain future date some goods, currency or a financial asset at

a rate (price) set at this point of closing the transaction.

• Futures contract - it is a standardized agreement to buy or to sell an asset,