Subject: Re: futures markets
From: "Gerald Dwyer Jr." <gdwyer@dwyerecon.com>
Date: Fri, 24 May 2002 13:49:56 -0400

From: "Forrest J. Cavalier III"
>
>A futures market is based on expected future value of something
>definite, not a nebulous "many will be better off."  "Futures"
>can be sold for commodities (which arch is not), or as/for shares
>in companies (a.k.a. revenue streams.)
>
Taking what you say one step further:

The second sentence about futures markets is more nearly precisely correct than the
first. In general, a futures contract is a contract to deliver a specific number of
a particular thing at a particular place at a particular time or time period. For example,
the futures contract for light, sweet crude oil on the New York Mercantile Exchange
is a contract for the delivery of 1,000 U.S. barrels of crude oil in Cushing Oklahoma.
(The actual contract is more precise about important details.)

At expiration, a futures contract is a contract for a specific commodity with a well-defined
spot price. At dates before expiration, a futures contract reflects the present value
of that future transaction.

Jerry Dwyer