One of the fastest growing sectors of the financial market is futures. It is quite easy to explain this state of affairs. Futures have high liquidity ratios. You can use a wide range of strategies to trade such assets. In this article, we will talk about what futures contracts are and what functions this financial instrument has.

Basic information

Futures are derivative financial instruments. Simply put, it is a contract for the purchase or sale of the underlying assets within a certain period of time and at a fixed value. Therefore, the purchaser of that financial instrument shall be insured against the fact that the market price of the underlying asset will become unacceptable to him. This can be about commodities, currencies, stocks, etc.

Futures has a specification. It shall be developed and approved by the place where the contract is traded. The specification contains the following parameters: name

; Cost price step Ticker Contract specificity (calculated/delivered); The price step of the underlying asset in and the contract.

Futures is of all kinds. Supply and settlement contracts are traded on the market. The first focuses on the actual supply of underlying assets. The second option does not indicate this result. After its expiry is the recalculation of income and profits between the signatories of the agreement.

What futures contracts are of interest to traders?

Futures have many significant advantages. Every investor or trader should know about them. These include:

Colossal selection of assets. Attractive liquidity ratio. Low commissions. Minimum requirements for initial investment.

To make futures transactions, you must use the same methods as other types of financial assets. Therefore, it is quite easy to trade such agreements. For futures trading to be profitable, you need to have knowledge of technical and fundamental analysis. In addition, it is necessary to understand the principles of capital management.

Now you know what the future holds. If you decide to invest or trade, we recommend that you pay attention to these financial instruments. With their help, you will be able to earn a high profit.

Post appeared for the first time in G-Forex.net.