Futures

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

Futures contracts are, in fact, a sort of derivative. Because their value is reliant on the value of an underlying asset, such as oil in the case of crude oil futures, they are derivatives. Futures, like many derivatives, are a leveraged financial instrument that can result in large gains or losses. As a result, they

Assume that excellent news arrives overnight from abroad, such as a central bank cutting interest rates or a country reporting stronger-than-expected GDP growth. Local equities markets are likely to climb, and investors may expect a higher U.S. market as well. The price of index futures will rise if they buy them. Nobody will be able

Futures trading allows investors to speculate or hedge on the price movement of a securities, commodity, or financial instrument. Traders do this by purchasing a futures contract, which is a legally binding agreement to buy or sell an asset at a predetermined price at a future date. Grain growers could sell their wheat for forward

A futures contract is an agreement to sell or buy an item at a certain price at a later date. Futures contracts are a type of hedge investment that is best understood when compared to commodities such as corn or oil. A farmer, for example, may want to lock in a reasonable price ahead of

A futures contract’s expiration day is the date on which it will cease to exist. If you keep a contract past its expiration date, you will be obligated to buy the underlying asset. Options allow you to exercise your rights in a variety of ways. Futures do not work in this way. You will be

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 p.m. Eastern. When is it possible to trade futures? Most futures can be traded electronically approximately 24 hours a day. Most equities futures can be traded through your broker during

Accessing publicly available market quotes is all it takes to keep track of the NASDAQ 100 index and futures. Visit a financial website like Yahoo! Finance or CNBC for “streaming” quotes on significant indices including the Dow Jones Industrials, the Standard & Poor’s 500, and the NASDAQ 100. When will stock futures be available? Stock

A futures contract, such as the CME’s Henry Hub natural gas futures contract, is the most frequent vehicle for traders to take a position on natural gas. With a futures contract, traders agree to supply a specific amount of natural gas at a predetermined price at a future date. This does, however, imply that the