Anabasis
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407Course · Professional

Futures

Standardized forward commitments.

The Course

Futures are standardized forward commitments. This course teaches the instrument, margin mechanics, and the futures curve.

You will finish able to read a commitment-of-traders report and interpret the shape of the curve.

Outcomes
  • 01

    Distinguish futures from forwards.

  • 02

    Explain the futures curve.

  • 03

    Read a commitment-of-traders report.

Prerequisites
  • — 402 or 406 recommended.
Pacing

1 week · ~3 hours.

  • IModule · ~1.5 hours.

    The instrument

    Standardization and margin.

    Standardization and margin — the two features that make the futures market work.

    What You Will Be Able To Do
    • — Distinguish futures from forwards.
    • — Explain daily mark-to-market.
    • — Compute margin requirements.
    Why here

    The daily settlement is what removes counterparty risk from the market.

    1. 01Futures vs. forwardsArticle12m
    2. 02Margin and marking to marketArticle12m
  • IIModule · ~1.5 hours.

    The curve

    Contango and backwardation.

    Contango and backwardation carry information about supply, storage, and expectation.

    What You Will Be Able To Do
    • — Read a futures curve.
    • — Interpret contango vs. backwardation.
    • — State the roll cost implication.
    Why here

    The curve shape is often more informative than the spot price.

    1. 01Reading a futures curveVisuals8m
A Note from the Faculty

Futures are the cleanest instrument in the market. Learning them decodes commodities, rates, and currencies.