(1) The futures market is a market where foreign currencies may be bought and sold for delivery at a future date. The futures market differs from the forward market in that only a few currencies are traded; moreover, trading occurs in standardize英语论文网 【http://www.51lunwen.org】d contracts and in specific geographic location, such as the International Monetary Market of the CME.

Initial Margin is the percentage of the purchase price of securities (that can be purchased on margin) that the investor must pay for with his or her own cash or marginable securities, also called the "initial margin requirement". Variation margin means a variable margin payment that is made by clearing members to their respective clearing houses based upon adverse price movements of the futures contracts that these members hold. Basis is the variation between the spot price of a deliverable commodity and the relative price of the futures contract for the same actual that has the shortest duration until maturity. A futures market's tick value is the cash value of one tick (one minimum price movement). The future contract has advantages over a forward contract in that it is not subject to default risk and is more liquid.

(2) An option is simply an agreement between a holder (buyer) and a writer (seller) that gives the holder the right, but not the obligation, to buy or sell financial instruments an any time through a specified date. A call option gives the right to buy currency and a put option gives the right sell. The prices at which currency can be bought or sold is the strike price or exercise price. An option is said to be “in the money” if the strike price is less than the current spot rate for a call or greater than the current spot rate for a put 本文来自：英语论文网 【http://www.51lunwen.org】