futures trading

Futures trading involves buying and selling contracts on the future price of a commodity or financial product. They’re typically used by hedgers to mitigate risk in a certain sector or industry, and by speculators to capitalize on short-term price movements. URL https://onlinefuturescontracts.com/

Hedgers are businesses and individuals who use futures contracts to protect against price volatility or exchange rate fluctuations in the interval between an underlying commodity’s purchase and delivery. They’re usually buyers and suppliers, such as a corn farmer who may have to buy many thousands of dollars worth of corn at the beginning of harvest in order to sell it for a profit when the crop is ready.

The Differences Between Futures and Forex Trading

In the same way, oil producers and major airlines use futures contracts to hedge against a potential price rise on the cost of jet fuel. Hedgers can also take advantage of futures’ low margins, which allows them to purchase a larger contract with less money than they would be able to afford if they bought the underlying product.

Traders can trade both long and short positions in futures contracts, but most are closed before expiration. They can also use market-on-close (MOC) orders, which execute at the end of the day’s session.

Commodities: Traders buy and sell futures contracts on a wide variety of commodities. These include crude oil, natural gas, coffee, wheat and precious metals like gold and silver.

Precious metals: Speculators trade futures on the price of gold, silver and platinum. They also trade on the price of rare earth metals.