Abstract
Stock exchange transactions may be divided into spot and future contracts, depending upon whether delivery of the traded objects is to be effected instantly upon conclusion of the contract or at some date in the future. Contracts for future delivery may consist of two distinct types: unconditional forward contracts and premium contracts, as is customary to call the latter kind. Concerning the former, the traded objects29 must be delivered or delivery of these must be taken, respectively; regarding the latter, one of the contracting parties, by making a payment upon conclusion of the deal, acquires the right to demand discharge of the contract or to cancel it (either in part or in its entirety) on the delivery date.
In modern terminology, this is the “underlying” (security, commodity, or object) of the derivative contract.
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References
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(2009). Translation of Bronzin’s Treatise. In: Hafner, W., Zimmermann, H. (eds) Vinzenz Bronzin’s Option Pricing Models. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-85711-2_5
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DOI: https://doi.org/10.1007/978-3-540-85711-2_5
Publisher Name: Springer, Berlin, Heidelberg
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