Bond Futures to Boost Liquidity
Economy, Business And Markets

Bond Futures to Boost Liquidity

Bond futures are instruments to provide more liquidity and reduce risks in the capital market, said a brokerage firm at stock exchange.

The bond futures not only provide more liquidity, but they also create an opportunity for those who are pessimistic about the market, Mohamad Beheshtian told SENA.
“A shareholder, for instance, buys bonds in cash but he predicts the market would plunge. He can then sell the bonds as a future contract. On the due date, he will make his profit even if the market plunges,” said Beheshtian, the manager of Khebregan Sahaam brokerage.
The bond futures first became tradable three years ago but they were not welcome due to some software problems, lack of necessary infrastructures, and low volume and value of transactions. When the bond futures transactions are low either in volume or value, the seller and buyer may not match and this will create obstacle to liquidity.
A bond future is a contractual obligation for the contract holder to purchase or sell a bond on a specified date at a predetermined price. A bond future can be bought in a futures exchange market and the prices and dates are determined at the time the future is purchased.

Short URL : http://goo.gl/8bN1z1

You can also read ...

How China Became Iran’s Coziest Trade Partner?
From bilateral trade to finance contracts and civil projects,...
The economy of the Islamic Republic of Iran has been tied to political and foreign affairs developments over the years.
This is the Financial Tribune’s last edition of the current...
Iranian Banking Sector Awaits Full JCPOA Benefits
Iran’s Deputy Foreign Minister Abbas Araqchi addressed various...
President Hassan Rouhani on Sunday spoke to reporters after the last Cabinet meeting of the current year.
President Hassan Rouhani on Sunday outlined his administration...
All-Out Growth in Interbank Market
The Central Bank of Iran has released its latest data on the...
Iran has more than 37 billion tons of proven mineral reserves and 57 billion tons of potential reserves.
Iran exported more than 58.09 million tons of mineral products...