FUTURES

What Are Futures?

Futures are standardized contracts to buy or sell an asset at a predetermined price on a specific future date. They are commonly used for commodities, stocks, indices, and cryptocurrencies.

Futures allow traders and businesses to hedge against price fluctuations or to speculate on market movements. They carry a higher level of risk due to leverage.

Long Position

A trader takes a long position when they expect the price of the asset to rise. Profits are made if the market moves upward.

Short Position

A trader takes a short position when they expect the price of the asset to fall. Profits are made if the market moves downward.

Key Features of Futures

Standardized Contracts: Same terms for all traders
Leverage: Allows control of large positions with smaller capital
Expiry Dates: Futures contracts expire on a fixed date
Hedging & Speculation: Useful for managing risk or profiting

💡 Final Insight

Futures trading can amplify gains but also increase losses. Understanding market trends, leverage, and risk management is essential for success.