Futures Trading Contracts

Futures trading contracts are normally classified into two types - Commodities and Treasuries. The term commodities refer to the contracts traded for physical delivery. Also known as financial instruments, Treasuries, are futures contracts ended with a cash settlement. Futures contracts can be traded directly and electronically.

Commodity futures contracts follow the same trading principles of shares of a stock market. The only difference is that every commodity contracts end in delivery. Its online trading version always depends on speculators and hedgers.

The commodity futures trading put some obligations on the buyers and sellers. The buyer is responsible for taking delivery and paying for the cash commodity during a fixed time period. The seller is responsible for delivering the commodity, for which he/she will be paid the price that was decided in the exchange pit by the dealers.

Commodity futures create a contract to sell or buy the goods for a fixed price by a certain date in the future. This contract period is the major reason of the huge potential for profit and loss. Future trading also involves all the exciting aspects of trading, as it intrinsically occupies predictions of the future and consequently uncertainty and risk.

Treasuries Futures contracts, which is traded for cash settlement, include treasury notes, bonds, short sterling, gilt, euribor, etc. These types of contacts are also popular by the name ‘currency futures’. These contracts are generally traded through electronic platforms.

Oil, grain and metal contracts are same example for the Commodity Futures trading. Soybean, sugar, oats, corn, wheat, etc are example for agricultural commodities. Future oil contracts include crude oil, heating oil, natural gas, etc. Examples for commodity metal contracts are gold, silver, platinum, etc.

This article is written for www.orientfinance.com. Orient Financial Brokers (OFB) S.L.P. conducts brokerage in Foreign Exchange, Futures, and Commodities in the Middle East.

Article Source:http://www.articlesbase.com/currency-trading-articles/futures-trading-contracts-1668345.html

Avatar for Scott Hamlin

Author: 

Related Posts

Leave a Reply