What do you need to know about the futures market?

All you need to know about the futures market. What Is the Futures Market? A futures market is a market in which traders buy and sell futures contracts. Futures markets are also called futures exchanges.

What is a futures contract?

期貨合約 （英語： Futures contract ），簡稱 期貨 （英語： Futures ），是一種跨越時間的交易方式， 衍生性金融商品 的一種。 買賣雙方透過簽訂 合約 ，同意按指定的時間、價格與其他交易條件，交收指定數量的 現貨 。

Why are futures prices lower than spot prices?

In rare instances, futures prices can also be lower than spot prices, a condition known as backwardation. Traders use the futures market to speculate on future asset prices, but businesses also use the futures market to hedge against future pricing volatility. In addition, the futures market can be used as an economic forecasting tool.

What is a futures speculator?

Futures contracts are traded on futures exchanges and are used for both hedging and price speculation. Most futures speculators sell or offset their contracts prior to expiration so they are not forced to accept physical delivery of the underlying asset.