london international financial futures and options exchange (LIFFE)

LIFFE was founded in 1982 and provides opportunities to buy and sell both future and options in currencies ,gilts ands comparable foreign securities . it became the third largest such market in the world , after the two in Chicago , where futures began last century (in agricultural products ).
however ,it has faced severe competition from the from the french derivatives exchange (MATIF ) and from direct deals between international banks in what are termed OTC (over -the-counter ) transactions .
a future is a commitment ,ie an obligation , to buy or sell currency or a security at acertain future data . the firm owning the commitment can always sell it before the data arrives , if it wishes to do so .
an option is aright , but not an obligation , to buy or sell currency , etc up to a certain data .
futures and options are given atechnical name- derivatives - because their prices are derived from the prices of the instruments and currencies on the ordinary (cash) markets .