What is futures trading?

It is an agreement where prices derive from their underlying assets. Finally, futures trading is facilitated by futures contracts, commonly used by individual traders to make a profit or by corporations to lock in the prices of commodities they need for production and manufacturing.

Can you buy futures on stocks?

You can buy futures on commodities like coffee, stock indexes like the S&P 500 or cryptocurrencies like Bitcoin. Leverage and margin problems are risks of futures trading, which is less regulated than stock trading. What are futures? Futures are derivative contracts to buy or sell an asset at a future date at an agreed-upon price.

What is a futures contract?

Futures are financial contracts obligating the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange.

What is electronic trading?

Electronic trading involves setting up an account with a brokerage of your choice, including providing your contact and financial information—to facilitate electronic transfers between your bank and the brokerage.