2.2 specification of a futures contract

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fundamentals of futures and options

notice of intention to deliver

filed by the short position party when it is ready

asset

a commodity, a variation into what is available in the market place

the contract size

the amount of the asset that has to be delivered under one contract

delivery arrangements

place where delivery will be made must be specified

limit down

price moves from the previous days close by an amount equal to the daily price limit

limit up

if it moves up by the limit

limit move

a move in either direction equal to the daily price limit

price limits

purpose is to prevent large price movements from occurring because of speculators

position limits

are the maximum number of contracts that a speculator may hold. purpose is to prevent speculators from influencing the market.

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