![]() Regardless of what product or asset is being traded, the buyer and seller of any futures contract is obliged to fulfill their end of the agreement on or before the contract end date. In futures trading, a variety of different assets are traded, from commodities and currencies to indexes and everything in between, offering traders a wide range of products.įutures trading is so popular because the contracts can be sold right up until the set fulfillment date. The seller is agreeing to sell those 2,000 barrels of oil at the agreed price, regardless of their current worth. ![]() ![]() Futures trading means that the buyer is obliged to buy the underlying asset, while the seller is obliged to sell the agreed asset when the contract expires, or before this date.įor example, if a buyer purchases an October oil futures contract, they are committing to purchasing 2,000 barrels of oil at the agreed price on the October expiration of the contract, regardless of the oil’s market value at the time. Usually, two parties – one buyer and one seller – set a price at which to exchange an asset at a future date. Futures trading involves contracts that allow you to set a price for a certain asset in the present which can then be exchanged in the future.Īlso known as ‘futures contracts’, this kind of agreement is legally binding and is required to be fulfilled either by financial payment or delivery of the asset.
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