Futures

Index futures are contracts that allow a trader to purchase or sell a financial index today and have it resolved at a later date. Traders speculate on the price direction of an index, such as the S&P 500, using index futures. What can you learn from index futures? Most people who follow the financial markets […]

The total number of outstanding derivative contracts, such as options or futures, that have not been settled for an asset is referred to as open interest. The overall open interest does not count, and each purchase and sell contract must be added up. Instead, open interest gives a more realistic picture of options trading activity,

Futures are a sort of derivative contract in which the buyer and seller agree to buy or sell a specified commodity asset or security at a predetermined price at a future date. Futures contracts, or simply “futures,” are traded on futures exchanges such as the CME Group and require a futures-approved brokerage account. A futures

What Are Futures and How Do They Work? Futures are financial derivatives that bind the parties to trade an item at a fixed price and date in the future. Regardless of the prevailing market price at the expiration date, the buyer or seller must purchase or sell the underlying asset at the predetermined price. Is

When both index futures and underlying stocks are trading at the same time, index arbitrage keeps the index futures price near to fair value. While the stock market in the United States begins at 9:30 a.m. EST and closes at 4:00 p.m. EST, index futures trade around the clock on systems such as Globex, a

Investing in commodities can be done in a variety of ways. One option is to buy various amounts of physical raw materials like precious metal bullion. Futures contracts or exchange-traded products (ETPs) that directly track a single commodities index are also available to investors. These are high-risk, high-complex investments that are usually only recommended for

From 6:00 p.m. EST on Sunday to 5:00 p.m. EST on Friday, futures markets are open nearly 24 hours a day, six days a week. Futures traders have more time to trade than stock and ETF traders, who only have a 6.5-hour trading session 5 days a week. Futures traders now have more trading flexibility

Each form of futures contract agricultural, energy, interest rate, equities, and so on has its own trading hours, which are sometimes dictated by the underlying products’ or securities’ market hours. Depending on the commodity, most futures contracts begin trading on Sunday at 6 p.m. Eastern time and close on Friday afternoon between 4:30 and 5

Stock index futures, such as the S&P 500 E-mini Futures (ES), reflect expectations for a stock index’s price at a later date, based on dividends and interest rates. Index futures are two-party agreements that are considered a zero-sum game because when one party wins, the other loses, and there is no net wealth transfer. While

Exchanges establish starting margin requirements for futures contracts as low as 5% or 10% of the contract to be traded. A futures account holder can open a long position in a crude oil futures contract for $100,000 by posting only $5,000 initial margin, or 5% of the contract value. In other words, the account holder