Futures Trading

Futures trading involves buying and selling contracts that obligate the buyer to purchase, or the seller to sell, an asset at a predetermined future date and price. These contracts are typically used for commodities, currencies, stock indices, or other financial instruments. Futures trading allows investors and businesses to hedge against price fluctuations or speculate on price movements. Traders leverage these contracts to capitalize on market volatility, but it also involves significant risk due to the potential for large losses. Futures are standardized and traded on exchanges, and they require a margin, which acts as a deposit to cover potential losses.