INTERNATIONAL TRADE FINANCE Download and make a slide show to understand clearly

2. Both types of contracts allow people to buy or
sell a specific type of asset at a specific time at a
given price.
 are exchange-traded
and, therefore, are standardized contracts
are private agreements
between two parties and are not as rigid in their
stated terms and conditions.

3. A forward contract is a private agreement
between two parties giving the buyer an
obligation to purchase an asset (and the seller
an obligation to sell an asset) at a set price at a
future point in time.
-Grain, precious metals, electricity, oil,
and natural gas etc…
-But foreign currencies and financial
instruments are also part of today's
forward markets

4. A 'Future' is a contract to buy or sell the
underlying asset for a specific price at a pre-
determined time.
If you buy a futures contract, it means that you
promise to pay the price of the asset at a specified
time.
 If you sell a future, you effectively make a promise
to transfer the asset to the buyer of the future at a
specified price at a particular time.
Every futures contract has the following features:
-Buyer -Seller -Expiry -Price
Some of the most popular assets on which futures

5. OPTIONS contracts are instruments that give the
holder of the instrument the right to buy or sell the
underlying asset at a predetermined price.
An option can be a 'call' option or a 'put' option.
 A call option gives the buyer, the right to buy the
asset at a given price. This 'given price' is called
'strike price'.
A put option is the right to sell the underlying
stock at a predetermined strike price by a certain
date.
OPTIONS

6. A contract that grants the holder the right, but
not the obligation, to buy or sell currency at a
specified exchange rate during a specified period
of time.
For this right, a premium is paid to the broker,
which will vary depending on the number of
contracts purchased.
Currency options are one of the best ways for
corporations or individuals to hedge against
adverse movements in exchange rates.
Example :
An option to buy US$(USD) for Indian is an
USD call and an INR put.
Conversely , an option to sell USD forINR is an USD put
and an INR call.