What are futures?

What are 'Futures'. Futures are financial contracts obligating the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on...

What is a a futures contract in crypto trading?

A futures contract gives the buyer the obligation to purchase a specific asset, and the seller to sell and deliver that asset at a specific future date, unless the holder's position is closed prior to expiration.

What is the difference between futures trading and other financial instruments?

Perhaps the most important difference between futures trading and other financial instruments would be in the use of leverage. So we know that futures trading is a contract for investing in a derivative. When such a contract is initiated, the investor need not pay the full amount for a contract, only a small upfront payment is required.

What are options and futures trading?

Key Takeaways Options and futures are similar trading products that provide investors with the chance to make money and hedge current investments. An option gives the buyer the right, but not the obligation, to buy (or sell) an asset at a specific price at any time during the life of the contract.