Discuss What It Means for a Futures Contract to Be

question 51

Essay

Discuss what it means for a futures contract to be marked to market. If you provide an example, assume that the hedger has purchased a 5,000 bushel wheat contract at a price of $6.90 per bushel.

---

Definitions:

Order Instrument

A financial document that is payable to a specified person or entity, such as a check, which requires endorsement for cashing or deposit.

Endorsed

Officially approved or supported, or signed on the back to transfer ownership or to show agreement.

Negotiability

The feature of a financial instrument that allows it to be transferred or assigned from one party to another in a manner that the transferee obtains a good title.

Preponderance of the Evidence

Preponderance of the evidence is the standard of proof in most civil trials, which means that the evidence on one side outweighs, or is more convincing than, the evidence on the other side.