Motivation for the futures exchange | Finance & Capital Markets | Khan Academy

How an exchange can benefit from trading futures and how it can use margin to mitigate its risk. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/forward-futures-contracts/v/futures-margin-mechanics?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/futures-introduction?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. I think you mean market maker makes the 2 cent profit.
2. Love your math videos, but here you dropped the ball. The exchange does not take the bid-ask spread, but just a small (0.001% or so) commission. What the buyer pays, the seller receives (minus the commissions). This vid describes a trader, not an exchange.
3. great picture
4. STOCKS :O
5. The titles often scare some part of me: "oh no it's so complicated, i'm afraid i'll not understand it..." But as soon as i watch them it is more than easy to understand!!! Thank you!
6. Nice video! Love the drawing.