What products are traded in the futures markets?
Futures are traded on a wide variety of assets, including commodities, financial instruments or other products. What distinguishes futures from securities products? Futures’ characteristics make them extremely versatile tools that can be used in a variety of ways. They involve the trading of contracts or agreements; no physical product or security changes hands unless the contract is held until the delivery (expiration) date. Futures are highly leveraged and accessible to most investors. Short positions can be effected as easily as long positions: for example, no inventory is needed to transact a short sale, there are no price restrictions (you don’t have to wait for an uptick), and the cost to initiate a short position is significantly lower. Who participates in futures trading? There are two main categories of participants: hedgers and speculators. In general, hedgers are commercial users or producers of the underlying asset who utilize the futures markets in an attempt to offset the
