tgenerates3.5milliondollars.Plusthefarmerhasobtainedontheseconddayhalfandmilliondollars.proxyareproximately4milliondollarswhichisidenticaltowhathappenwiththeforwardcontract.Nowthisisasimplifiedexampleobviously,becauseanumberofthingscouldmakeitnotexactlyequal.Forexample,the500,000dollarsthatthefarmergetsinthesecondday,thefarmercouldprobableinvestitatthesomeinterestrate.Thatinterestcouldchangethroughtime.Inthatweintroducethedifferencebetweentheforwardsandfutures.Themainideaisbasicallythesame.Thedistinguishcharacteristicofthefuturecontractisdailyrewritingthecontractsometimescalledmarktomarket.Sothemarket'spricechange,thecontractischangedtoreflectthemarketprice.Whatthiscausesisveryhamarginiouscontractthatistradedinthemarket.Itmakesitveryliquid.Itmakesitveryeasytogetinandoutofthefuturecontract.
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