For example , in the derivatives market , you can not buy a contract for a single share .
Futures exchanges , such as Euronext.liffe and the Chicago Mercantile Exchange , trade in standardized derivative contracts . The members of the exchange hold positions in these contracts with the exchange , who acts as central counterparty .
When one party goes long ( buys a futures contract ) , another goes short ( sells ) .
When a new contract is introduced , the total position in the contract is zero . In simple words , this means that you are the seller of a derivative contract .In the derivatives market being a seller means having a short term horizon and therefore you are shorting the underlying financial instrument .
Futures exchanges , such as Euronext.liffe and the Chicago Mercantile Exchange , trade in standardized derivative contracts . The members of the exchange hold positions in these contracts with the exchange , who acts as central counterparty .
When one party goes long ( buys a futures contract ) , another goes short ( sells ) .
When a new contract is introduced , the total position in the contract is zero . In simple words , this means that you are the seller of a derivative contract .In the derivatives market being a seller means having a short term horizon and therefore you are shorting the underlying financial instrument .
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