Futures and Forwards Contracts..

Both Futures and Forwards Contracts are agreements to trade or do a deal on a set future date, but there are some significant differences.

1. Futures are highly standardized and should follow the standards, while each and every Forward contract is personalized and unique between the parties interact with the trade or deal.

2. Futures are settled at the end with the details final price; whereas etc on the last trading date of the contract while the Forwards are already settled at the start with a forward price.

3. The Futures contract does not specifically mention to whom the delivery of a physical asset must be made; but in a Forwards contract it is clearly specified and stated who receives the delivery.

4. Futures are always traded on an exchange, while Forwards are traded over-the-counter.


What are the Benefits of a Futures Contract?

A Futures Contract is a unique and personalized investment among the other alternative investments. It has few remarkable characteristics that make it more attractive to the investors.

** Simple and uncomplicated - Futures contracts are very easy to follow and it is based on your thoughts of whether the prices are going to rise or fall and you sell and buy.

** Easy to short sell - There is no paper work or any high financial requirements to be met and it is a very logical strategy to follow.

** Easy transaction entry and exit - It is very easy to enter and exit a transaction.

** Investment opportunities - A Futures Contract helps you to invest directly in the market and no factors like management issues, market shares to be considered.

Structure:
Forwards - Customized according to the customer’s need and no initial payment required.
Futures - Standardized. Initial margin payment is a must.

Method of pre-termination:
Forwards - Opposite contract with same or different counterparty and counterparty risk remains while terminating with different counterparty.
Futures - Opposite contract on the exchange

Risk:
Forwards – Very high counterparty risk
Futures - Low risk

Market regulations:
Forwards - Not regulations
Futures - Government regulated market

What is it?:
Forwards – An agreement between two parties to buy or sell an asset at a pre-agreed point in time.
Futures - A standardized contract traded on a futures exchange, to buy or sell a certain underlying instrument at a certain date in the future, at a specified price.

Institutional guarantee:
Forwards - Contracting parties
Futures - Clearing House

Contract size:
Forwards - Depending contracting parties, transaction and requirements
Futures – Fully standardized

Expiry date:
Forwards - Depends on the transaction and other factors
Futures - Standardized

Transaction method:
Forwards – Can be negotiate directly by the buyer and seller
Futures - Quoted and traded on the Exchange

Guarantees:
Forwards - No guarantee of settlement until the date of maturity.
Futures - Both parties must deposit a marginal guarantee. The value of the operation is underlying market rates that settle profits and losses in a daily basis.

What is ISO?

In film photography ISO was the indication of how sensitive a film was to light and measured in numbers such as 100, 200, 400, 800 etc. The lower the ISO number, the lower the sensitivity of the film and the finer the grain in the shots taken.

In Digital Photography ISO measures the sensitivity of the image sensor. The same principles apply as in film photography; the lower the number the less sensitive your camera is to light and the finer the grain. Higher ISO settings can be used in darker situations to get faster shutter speeds however the cost is noisier shots.

Tip1: 100 ISO is generally accepted as ‘normal’ and will give you lovely crisp shots with little noise/grain, if you bumped your ISO up from 100 to 400 you’ll notice that you can shoot at higher shutter speeds and smaller apertures.

Always ask your selves these questions when choosing the ISO setting.

• Light – Is the subject well lit?

• Grain – Do I want a grainy shot or one without noise?

• Tripod – Am I using a tripod?

• Moving Subject – Is my subject moving or still?

Tip2: If the subject is well lit, need little graininess in the picture plus using a tripod and the subject is not moving; generally a pretty low ISO rating would do the magic.

Tip3: If it’s dark, want grain, not using a tripod and the subject is moving consider about increasing the ISO as it will enable to shoot with a high shutter speed and still expose the shot well. But don’t forget increase in ISO will generate noisier shots.

Don’t forget to push ISO to higher settings, at:

• Indoor Sports Events – subject is moving fast and have limited light available.

• Concerts – low in light and those are ‘no-flash’ zones

• Art Galleries, Churches etc- ‘no-flash’ zones and of course low light.

• Birthday Parties – in a dark room with candles to blow situation will be ruined by a bright flash. Increasing the ISO can help capture the scene.

ISO is an important factor of digital photography. Experimenting with different settings in your camera and compare the differences it makes on your images will help you to get more practice and knowledge.