文档介绍：Ex - Cereal Production
Ex - Kellogg produces cereal. A major component and cost factor is sugar.
Forecasted income & sales volume is set by using a fixed selling price.
Changes in cost can impact these forecasts.
To fix your sugar costs, you would ideally like to purchase all your sugar today, since you like today’s price, and made your forecasts based on it. But, you can not.
You can, however, sign a contract to purchase sugar at various points in the future for a price negotiated today.
This contract is called a “Forward Contract.”
This technique of managing your sugar costs is called “Hedging.”
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企业财务会计管理专业版
Type of Contracts
1- Spot Contract - A K for immediate sale & delivery of an asset.
2- Forward Contract - A K between two people for the delivery of an asset at a negotiated price on a set date in the future.
3- Futures Contract - A K similar to a forward contract, except there is an intermediary that creates a standardized contract. Thus, the two parties do not have to negotiate the terms of the contract.
The intermediary is the Commodity Clearing Corp (CCC). The CCC guarantees all trades & “provides” a secondary market for the speculation of Futures.
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企业财务会计管理专业版
Types of Futures
Commodity Futures
-Sugar -Corn -OJ
-Wheat -Soy beans -Pork bellies
Financial Futures
-Tbills -Yen -GNMA
-Stocks -Eurodollars
Index Futures
-S&P 500 -Value Line Index
-Vanguard Index
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企业财务会计管理专业版
Futures Contract Concepts
Not an actual sale
Always a winner & a loser (unlike stocks)
K are “settled” every day. (Marked to Market)
Hedge - K used to eliminate risk by locking in prices
Speculation - K used to gamble
Margin - not a sale - post partial amount
Hog K = 30,000 lbs
Tbill K = $ mil
Value line Index K = $index x 500
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企业财务会计管理专业版
Ex - Settlement & Speculate
You are speculating in Hog Futures. You think that the Spot Price of hogs will rise in the future. Thus, you go Long on 10 Hog Fut