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Finance GlossaryAdjusted Futures Price
Adjusted Futures Price
Definition of Adjusted Futures Price
An adjusted futures price shows the cost of purchasing, financing, and delivering the underlying assets of a futures contract.
The adjusted futures price is calculated by multiplying the price of the underlying asset by the number of units to be delivered (known as the conversion factor).
The adjusted futures price is calculated by multiplying the price of the underlying asset by the number of units to be delivered (known as the conversion factor).
Related Terms
Futures and Options
Futures and options are derivative contracts that derive their value from one or more underlying financial securities like stocks, bonds, interest rates, currencies, and commodities.
Every futures and options contract contains an expiration date and a price for the underlying that’s pre-agreed. Futures are a right and an obligation whereas options are a right but not an obligation to exercise the terms of the contract.
Every futures and options contract contains an expiration date and a price for the underlying that’s pre-agreed. Futures are a right and an obligation whereas options are a right but not an obligation to exercise the terms of the contract.
Indices
Indices are a collection of financial instruments that measure the performance of those very instruments.
For example, stock market indices like Nifty 50 and Sensex measure the top 50 and 30 stocks by market capitalization.
If indices go up, it generally means that the underlying stocks are performing well. The opposite is true when indices plummet.
By the way, there’s no limit to how many instruments an index can track. The Nifty Smallcap 250 tracks 250 stocks whereas Nifty Bank tracks 12 stocks.
For example, stock market indices like Nifty 50 and Sensex measure the top 50 and 30 stocks by market capitalization.
If indices go up, it generally means that the underlying stocks are performing well. The opposite is true when indices plummet.
By the way, there’s no limit to how many instruments an index can track. The Nifty Smallcap 250 tracks 250 stocks whereas Nifty Bank tracks 12 stocks.
Asset Allocation
Asset allocation is a strategy or method in which an investor decides how much money they should allocate to an investment based on their risk profile, financial goals, and other factors to maximize returns and minimize risk.
Growth Stocks
Growth stocks are shares of companies that have the potential to outperform the market. These are stocks can grow faster than the market due to strong fundamental characteristics like a strong balance sheet, high Earnings Per Share, solid P/E, and more that can bolster its profits in the medium to long term.
At The Money
At The Money is a scenario in which the strike price of an options contract is the same as the market price of its underlying security.
Exercising an option At The Money can lead to a loss as the premium paid for the contract won’t be recovered.
That said, At The Money is known to be a positive indicator as it indicates the option may soon have intrinsic value.
Exercising an option At The Money can lead to a loss as the premium paid for the contract won’t be recovered.
That said, At The Money is known to be a positive indicator as it indicates the option may soon have intrinsic value.
Modified Duration
In fixed income, Modified Duration is a measure used to estimate the sensitivity of a bond’s price with respect to changes in interest rates. It shows the approximate percentage change in a bond’s price for a 1% change in yield, helping investors assess and manage interest rate risk.
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