What is Futures Trading?
Futures Trading is a form of investment which involves speculating on the price of a commodity going up or down in the future. What is a commodity? Most commodities you see and use every day of your life: • the corn in your morning cereal which you have for breakfast, • the lumber that makes your breakfast-table and chairs • the gold on your watch and jewellery, • the cotton that makes your clothes, • the steel which makes your motor car and the crude oil which runs it and takes you to work, • the wheat that makes the bread in your lunchtime sandwiches • the beef and potatoes you eat for lunch, • the currency you use to buy all these things… … All these commodities (and dozens more) are traded between hundreds-of-thousands of investors, every day, all over the world. They are all trying to make a profit by buying a commodity at a low price and selling at a higher price. Futures trading is mainly speculative ‘paper’ investing, i.e. it is rare for the investors to actually hold the p
