Futures trading is an important part of successful market business. All over the world there are four main types of markets. They are Credit, Exchange, Stock and Gold global markets. There are such world-known Exchange markets centers as London. Frankfurt-am-Main, Zurich, Paris, New-York, Tokyo, Singapore and Hong-Kong. Because they are about money, money, money... While working at an Exchange market there are 2 types of operations, one is spot (cash operations up to 1 year, contracts of the same currency but different currency exchange dates) and the other is urgent. To the latter type such subtypes as futures (standard contracts of the standardized amount of commodities, e.g. 50 tons, to transact in the future), forward (a contract of an individual amount of commodities, e.g.31 tons), and option (some right to transmit commodities at some date, one should pay for it) contracts belong.
We are interested in examining futures trading contracts. Recently this phrase has become one of the most logged in the Internet implying that more and more people are eager to know what the legendary futures trading means. It can be of two types, the one is deliverable and the other is non-deliverable. The former futures trading contract is supposed to have a real delivery of a basis asset at a set date and at the pre-arranged price and the latter is a payment futures trading contract, no delivery, but pay-roll. Futures trading contracts sometimes are assumed to be similar to forwards. But it's the wrong supposition, because there are some key dissimilarities between them and they are:
- futures trading is a greatly standardized exchange, forwards can be unique OTC contracts meaning they don't emerge at a formal stock exchange catalogue;
- price of futures trading commodities is set at the very futures trading end and forwards have settlement price in the contact;
- futures trading risks are believed to be one of the lowest comparing to other subtypes of urgent contracts;
- a delivery spot isn't pre-set in futures trading contracts, but is pre-set on the contrary in forward contracts.
One of the main features of futures trading contracts is their liquidity. Futures contracts are widely-used in currency futures trading, that is intensive and global. Nowadays on-line futures trading is available. In order to open successful futures trading one should have a sufficient beginning capital and perform a full analysis of futures trading risks. Truth be told futures trading is no game or gambling, it's a serious and risky business, before taking to it, make sure you have mastered all the basics of futures trading and strategies.
In the world there is a wide range of markets where futures are traded. They are:
- Forex futures trading markets;
- money futures trading markets;
- bond futures trading markets;
- equity index markets;
- raw or primary goods futures trading markets.
By the way futures are traded by either hedgers (real selling or buying goods) or speculators looking only for profit with no intention to purchase some commodities. Bear in mind that futures trading is regulated by a certain organization in the countries admitting futures trading to be valid. e.g. In the USA it's the Commodity Futures Trading Commission. Even the above fact proves that futures trading gains more and more importance all over the world. |