Future Trading
Futures trading involves the buying and selling of futures contracts on a recognized exchange or over the counter. These contracts are derivatives that obligate a trader to buy or sell an underlying asset at a predetermined price and date in the future. Futures can be traded on various assets, including equity shares, commodities, currencies, and interest rates. Traders in the futures market are typically classified as either: 1. Speculators: They trade futures contracts with the goal of making a profit by predicting price movements of the underlying asset. 2. Hedgers: They use futures contracts to manage risk and protect themselves from potential losses caused by unfavorable market movements. Futures trading allows for leverage, but also involves significant risk, particularly for speculators.
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