Futures are the subject matter that is bought and sold now, but will be settled or delivered in the future.
This thing can be a commodity, or it can be a financial instrument or indicator. The date of settlement of futures can be one week later, one month later, or even one year later.
As opposed to spot, futures are financial contracts that contain financial instruments or future physical commodity sales.
Futures Contract
A contract or agreement to buy or sell futures is called a futures contract. A futures contract is a document that agrees that both parties will trade at a specific time.
Futures Market
The place where futures are bought and sold is called the futures market. Investors can invest or speculate in futures. Improper speculation on futures can lead to volatility in financial markets.
Types of Futures
Futures are a way of trading that spans time. By signing a standardized contract (futures contract), buyers and sellers agree to settle a specified quantity of spot goods according to specified trading conditions.
Usually futures are traded on futures exchanges, but some futures contracts can also be traded over the counter (OTC).
Futures are a kind of derivative financial commodities. According to the type of subject matter, futures can be divided into two categories: commodity futures and financial futures.
Among futures traders, hedgers lock in profits and costs by buying and selling futures and reduce the risk of price fluctuations caused by time.
Speculators (arbitrageurs) take more risk through futures trading and wait for opportunities to profit from price fluctuations.
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