Futures Pricing, Margins, Marking to Market and Hedging

Futures Pricing, Margins, Marking to Market and Hedging - Article

Futures are standardised exchange-traded derivatives used to hedge or take exposure to currencies, interest rates, securities, and other permitted underlyings. This article explains **futures pricing, cost of carry, initial margin, variation margin, daily marking to market, contract profit or loss, hedge direction, hedge ratio, and PVBP-based interest-rate hedging**. It focuses on numerical relationships and common CAIIB calculation traps without duplicating detailed solved examples.