What are Futures?
Futures are standardized exchange-traded contracts that require the delivery of commodity, bond, currency or stock index at a specified price, on a specified future date. They are standardized because they play huge part in futures exchange.
The futures market rooted from the commodities industry. Commodities are tangible assets that people used in their everyday lives. It could be in the form of corn, wheat, gold, cotton, steel or the currency you use to buy all these things. Farmers and producers of these commodities found a way of managing the risk of the uncertain price of future production through ‘future contracts.’
The Trading Process
All these commodities are being traded between millions of investors all over the world. Trading futures is a form of investment in which traders speculate on the price of a commodity group. The ultimate goal is to speculate whether the price is going to go up or down in the future and to earn profit by buying low and selling higher.
There are two main participants involve in futures trading: the hedgers and speculators. A hedger is a producer of the commodity. They trade future contracts to protect themselves from future price changes in their product. They make profit on future trades by selling at a high price and exiting the contract by buying at a lower price.
Speculators, on the other hand, can be floor traders or private investors. These independent floor traders are also referred to as “locals” who trade for their own accounts. They handle trades either for their personal clients or brokerage firms.
The Winning Process
The role of futures trading companies or futures trading brokers covers a huge importance in helping users arrive at a smart, informed decision when venturing in this exciting world. Traders should look for a platform where they can trust the process. ITRADER is an online trading platform that can give you opportunities in the global market. If you are a beginner in futures trading, you can trust ITRADER’s powerful software application that provides answer to the complicated factors of futures trading and order management. It also provides in-depth education tools that can give users ample knowledge about commodities, its recent news and updates, and help them become better on futures market.