Think: The contract IS the option. The investments you make in the futures market are actually contracts. You aren't buying an asset outright, like what happens in the stock market when you buy a share of some company. Instead, in futures trading, someone has given you the right to either buy or sell a set amount of some asset (shares of stock or barrels of oil or whatever) at a certain set price by a certain date.
An assignable contract allows you to transfer the contract to the third party (or to put it another way, you can assign it to someone else). This allows you to sell the contract to someone else if it becomes more valuable, rather than waiting to complete the transaction yourself. Not all futures contracts are assignable, however.
Assignable contracts are like making a bet on the Kentucky Derby, seeing your horse get out to a big lead, and then selling your betting slip to someone else while the race is still being run. You are eliminating the risk that your horse might trip and end up losing the race. You are also eliminating the hassle involved with cashing in the winning bet if the horse ends up winning.
Related or Semi-related Video
Finance: What is a Comfort Letter?6 Views
Finance a la shmoop what is a comfort letter? S....See the smooth curves there is [An S letter appears]
that comforting okay okay comfort letter is a letter
this kind of letter written by an expert usually someone like an auditor or a tax [Expert appears with comfort letter]
attorney in one form or another who has done deep due diligence into a company
looked at myriad details and data and volume counts of plastic cubes in their
inventory and then they've looked at their distribution contracts
you know with truckers and retail stores and drone deliverers and then they've [Drone flying in the air]
looked at their bank accounts both the onshore ones and the offshore ones that
you know they don't really like to talk about and then about 87 ish other things
that all those people look at and then they write a letter like an actual
letter which is usually given to the Board of Directors or an acquirer or
the investigating party whoever that is and that letter states that what the
company says it has or does is in fact what it has or does which is a good [Man discussing comfort letters]
thing to know so this letter well it just gives comfort to everyone
the only challenge can be you know trying not to become too comfortable [Man working near a waterfall]
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