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Full-Text Articles in Bankruptcy Law
Forward Contracts Preference Exception Broadly Construed, Brian King
Forward Contracts Preference Exception Broadly Construed, Brian King
Bankruptcy Research Library
(Excerpt)
Derivative transactions and financial contracts are a critical component of the United States economy. There are three main types of derivative contracts executed in our markets: futures, options and forward contracts. Each of these instruments derives value from an underlying security or resource with focus on a possible change in its future value. These instruments can be used as speculative investments, as hedges on securities already owned, or as a means of mitigating risk on volatility within a specific industry. An essential attribute of trading in these derivatives is “the ability of the parties to value their transaction on …