Chapter 01 · Section 1.1
Delivery
Forwards Futures
Contract Terms Variable Standard Delivery Expected ........ Trading ........ ........ Margins ........ ........ Credit Risk ........ ........ Liquidity ........ ........ Cash Flow ........ ........
With futures contracts
a) most of them result in delivery.
b) none of them result in delivery, because the market is used only by investors.
c) only 2-5% usually result in delivery.
d) only 20-30% usually result in delivery.
"Futures contracts, regardless of whether based on pork bellies, gold, U.S.Treasury bonds, or Swiss francs,are primarily risk management instruments instruments, and not primarily vehicles for purchasing the goods themselves." K.D.A.