Futures can be used for hedging or trade speculation. Futures are derivative financial contracts obligating the buyer to purchase an asset or the seller to sell an asset at a predetermined future date and set price. A futures contract allows an investor to speculate on the price of a financial instrument or commodity.
What is futures trading & how does it work?
It is an agreement where prices derive from their underlying assets. Finally, futures trading is facilitated by futures contracts, commonly used by individual traders to make a profit or by corporations to lock in the prices of commodities they need for production and manufacturing. What is futures trading?
What are index futures?
Index futures are contracts to buy or sell a financial index at a set price today, to be settled at a date in the future. These contracts were originally meant solely for institutional investors but are now open to anyone. Portfolio managers use index futures to hedge their equity positions against a loss in stocks.
What is Dow Futures?
Dow Futures is a stock market index futures contract traded on the Chicago Mercantile Exchange`s Globex electronic trading platform. Dow Futures is based off the Dow 30 stock index. The Dow 30 is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange (NYSE) and the NASDAQ.
