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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.

What is a futures contract?

Futures contracts are made in an attempt by producers and suppliers of commodities to avoid market volatility. These producers and suppliers negotiate contracts with an investor who agrees to take on both the risk and reward of a volatile market.

Are Futures a risky investment?

Futures contracts are derivatives securities—which may sound overly complicated and scary. Indeed, you are not alone if you believe that futures and other derivatives increase volatility in the financial markets and are responsible for financial instability in the markets or the larger economy.

Why should you invest in 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. Low commission rates start at $0 for U.S. listed stocks & ETFs*. Margin loan rates from 5.83% to 6.83%. Active investing with SoFi makes it easy to start investing in stocks and ETFs.

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