What are futures & how do they work?

Futuresare derivativesthat obligate two parties, a buyer and a seller, to trade an asset at a set current price until a specific future date. The term derivativesrefer to a financial contract that obtains value from underlying assets, commonly financial securities like stocks, bonds or commoditieslike oil or gold.

How to read futures charts?

If you want to know how to read futures charts, start with candlesticks. When looking at bars or candlesticks, each will show the opening and closing prices as well as the highs and lows for that time period. The top line (or where the wick ends) is the high. And the top of the candle is the open if red and close if green.

What are the different types of futures?

Types of futures. The types of futures available to trade include a wide range of financial and commodity-based contracts, from indexes, currencies, and debt to energies and metals, to agriculture products. Examples of futures contracts available are below (not an exhaustive list).

What is a future contract?

A future, also called a future contract, is a financial contract between two parties—a buyer and seller. The buyer agrees to purchase a specific amount of product from the seller such as currencies, commodities, or other financial assets—whatever the futures contract is for—at a specified price at a predetermined date in the future.