Author : R. Hadi, Maithem
THE IRAQI MAGAZINE FOR ADMINISTRATIVE SCIENCES,
2008, Volume 4, Issue 22, Pages 1-55
Using a very broad definition, a market is a place that puts sellers and buyers in communication with one another, where prices are discovered, and where ownership may be transferred. This applies to every market, small or big, as well as to the futures markets everywhere. In general, the economic function of marketing adds space and time utility to a commodity or asset. The important role provided by futures markets is the facilitation of the time dimension of marketing by permitting buyers and sellers to conduct transactions calling for delivery at some future date. This is accomplished using very specific rules and regulations governing trading which are laid down by the exchange bylaws. These rules, the exchange's highly formalized and organized nature, and the characteristics of futures contracts make the market unique. Thus, this paper is aimed to the theoretical presentation of the most important fundamentals of commodity futures markets. This paper is reached to many conclusions, most important among is the futures market doing number of social functions which is serve some social purpose. If did not, it would most likely have passed from existence some time ago. Futures markets are meeting the needs of three groups of futures market users: those who wish to discover information about future prices of commodities, those who wish to speculate, and those who wish to hedge. That means the main three functions of futures markets are hedging, price discovering, and speculation. The paper is approached to many recommendations, most important among is necessity to satisfying all the needed requirements to establish such market in Iraq and preparing encouraged investment climate to attract the international financial institutions which are playing a crucial role in the inducing a market's trading activities and activate it's international presence instead of constrain it and make it like the narrow local model of markets, especially with outstanding physical base of Iraq (in the crude oil field at least) which can be modified to success such proposal.