Futures trading, also known as derivatives trading, 주식 선물 is a type of financial instrument that involves the exchange of one party’s assets or securities for another party’s goods or securities at a specified date in the future. Like other types of derivatives, futures contracts are purely speculative.

Definition:

A futures contract is an agreement between two parties that specifies the exchange of goods at a specified future date for a specific price. The parties to the contract, or the holder and the seller, agree on the price of the underlying asset or security to be exchanged and are required to deliver the goods or securities in the agreed upon quantity at the time of delivery.

Trading Futures on Margin: What You Need to Know

The vast majority of futures are used by investors, who purchase or sell them to profit from the underlying commodity’s price movements. Investors often use futures as a way to protect their unrealized gains or minimize losses by short-selling or long-selling a commodity or stock in order to balance their portfolio or hedge against risk.

Buying and selling:

As with other forms of financial trading, futures trading involves the use of leverage (the ability to control a large investment with a small amount of cash). This can increase the potential for returns, but can lead to significant losses, too.

Traders must develop a plan for trading futures that includes entry and exit strategies, and risk management rules. It may also include protective orders like stop loss and bracket orders, which help manage downside risk.