What is the Definition of Futures Trading?
Futures trading generally is thought of as being more complex than typical stock and bond trading because it involves creating a contract for commodities to be delivered at a later date, based on a market price.The ContractA futures contract is unique from other forms of trading because once the contract is created, you are required to buy or sell. Essentially, a futures contract is a promise to make good on the deal at a later date.Traditional CommoditiesCommodities, stocks and bonds all can be traded using futures. Many investors use futures as a way of hedging or covering other investments in commodities or stocks.Other CommoditiesFutures trading also can be used for non-traditional commodities, such as currency, oil or other financial metrics.The StrategyBasically, you trade futures when you believe you have a good sense of what a commodity is going to do in the next few minutes, hours, days or even years. For instance, if you think oil is going to go up, you can purchase oil futur
