Aug 14

Online Futures TradingIn the case of futures trading there is generally a contract between one or more parties with respect to when an underlying asset will be bought or sold. The contract generally refers to a time in the future when the asset will be sold at that price. The futures contract will thus have the quantity of the asset, the place where the asset will be sold, the price at which it will be sold and the time at which it will be sold. All futures trading takes place on the futures index. The futures index is the index on which this futures trading occurs. The futures index is thus different from a normal index.

The date mentioned in the futures contract is referred to as the expiration date and indicates the date on which the particular asset might be sold or bought. The futures price will be the price at which this futures contract is going to trade in the futures market. The official price for the futures contract being traded at for that particular day is called as the settlement price of that futures contract for that particular day.

There is a distinction between the futures contract and the forwards contract which must be noted. The futures contracts are traded on the exchange where as the forwards contract is traded over the counter. And the futures contracts are margined where as the forwards contracts are not. Hence the futures contracts have a lesser element of credit risk as opposed to forwards contracts. Futures trading can be done by prospective traders on an online platform.

Comments are closed.

preload preload preload