Arbitraging futures contract | Finance & Capital Markets | Khan Academy

Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/forward-futures-contracts/v/arbitraging-futures-contracts-ii?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/forward-futures-contracts/v/lower-bound-on-forward-settlement-price?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: In many commodities markets, it is very helpful for buyers or sellers to lock-in future prices. This is what both forwards and futures allow for. This tutorial explains how they work and what the difference is between the two. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Comments

1. This was a very useful Video. Thank you!
2. is 10% the risk free rate?
3. thank you very easy and understandable
4. +Khan Academy while doing this, dont we have to take into account of the margin mechanism of a future contract?like if we are the seller which agree to sell for $300, arent we losing money ($100) in the margin account to the buyers when the price goes up?
5. I really like the videos~~~ they are really very useful. thanks
6. I actually laughed... I heard the example was an apple. However, excellent report. I enjoyed it... Now, I can make an apple... :)
7. Firstly, thanks for your efforts and having the academy. It's much appreciated. However, Apples are not a great example. Grains would be better unless you own an Apple plantation, where you can delivery apples from 1 years time from today... :) But sure people will remember due to that exception... At the same time, this sounds like that every futures contract is an "ARBITRAGE" contract. is that so?
8. thank for your hard works :)
9. i love these videos i really understand the material now thanks
10. So ,rice would've been a better example ?