What is futures trading?

Futures trading is a way to speculate on or hedge against the future value of all kinds of assets, including stocks, bonds, and commodities. Trading futures can provide much more leverage than trading stocks, offering the possibility for very high returns but with very high levels of risk.

What is a futures contract?

Futures can be used for hedging or trade speculation. Futures are derivative financial contracts obligating the buyer to purchase an asset or the seller to sell an asset at a predetermined future date and set price. A futures contract allows an investor to speculate on the price of a financial instrument or commodity.

What are the different types of futures?

Types of futures. The types of futures available to trade include a wide range of financial and commodity-based contracts, from indexes, currencies, and debt to energies and metals, to agriculture products. Examples of futures contracts available are below (not an exhaustive list).

What is a futures speculator?

Futures contracts are traded on futures exchanges and are used for both hedging and price speculation. Most futures speculators sell or offset their contracts prior to expiration so they are not forced to accept physical delivery of the underlying asset.