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What are futures markets?

Futures markets are also called futures exchanges. Traders use futures exchanges to hedge against price volatility and speculate on the future prices of stock indexes, currencies, commodities, interest rates and other assets. A futures contract is a contract to exchange a particular security at a specific price on a specific future date.

Are futures markets open 24 hours a day?

One of the biggest pros of futures markets is that they are open 24 hours a day, seven days a week. Unlike the stock and options markets, futures markets are always open for business. Futures markets are also relatively easy and inexpensive for the average trader to access.

What is a futures contract?

Futures contracts are legally binding agreements to buy or sell a specific asset at a specific price on a specific future date. Futures contract buyers are assuming the risk of future price changes in the underlying asset, while futures contract sellers are offsetting that risk.

What are the pros and cons of the futures market?

The futures market also provides investors with pure-play access to commodities and other types of assets that might otherwise be too difficult or costly to access. One of the biggest pros of futures markets is that they are open 24 hours a day, seven days a week. Unlike the stock and options markets, futures markets are always open for business.

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