How Is Futures Trading Different From Investing in the Stock Market?
Individuals who purchase stock or mutual funds comprised of stock are purchasing shares of ownership of the company in hope that the company will be profitable, and the value of their ownership will increase over time. A futures contract is an agreement to buy or sell a specific amount of a commodity at a specific date in the future. It is typically a short-term (3- to 6-month) transaction based on the price of the underlying commodity.
