The use of standardised derivative contracts ensures a homogenous product but this does not help promote trading activity.

Question

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Exchange-traded derivatives,such as futures,have standardised contracts,where the length of the contract,amount and condition of the underlying instrument or asset and terms for settlement are all standardised.The use of standardised contracts ensures a homogeneous product that promotes trading activity.

The Use of Standardised Derivative Contracts Ensures a Homogenous Product