Futures Trading

Futures trading deals with the delivery of specific amounts of commodities on specific dates in the future. Many of the commodities involved in futures trading are agricultural, in nature such as soybeans, wheat, corn ,etc. There are however futures contracts for many other commodities such as metals, currency, which are also exchanged and traded.

Futures trading is not like other forms of investing in that a trader is not required to own or buy the commodity being traded. Futures deal with speculation on what the price of a given commodity is going to be.

For instance if an investor is speculating on the price of soybeans and they expect the price of soybeans to rise in the future that investor will purchase soybean futures contracts. On the other hand if that investor expects the price of soybeans to fall they will sell soybean futures instead.

To learn more about futures trading browse the futures trading section of this blog.