In order to understand futures trading, you should know what derivatives trading is. Derivatives are financial contracts that derive their value from the price movement of another financial item. The price of a derivative tracks the price of another (i.e. underlying) from which it gets its value.
A commodity futures contract is an agreement to buy or sell a particular commodity at a future date. The price and the amount of the commodity are fixed at the time of the agreement.
Most contracts contemplate that the agreement will be fulfilled by actual delivery of the commodity.
Example: If you want to purchase a single July futures contract of ABC Ltd., you would have to do so at the price at which the July futures contracts are currently available in the derivatives market. Let's say that ABC Ltd July futures trading are at $1,000 per share. This means, you are agreeing to buy/sell at a fixed price of Rs 1,000 per share on the last Thursday in July.
You can learn more about forex trading at
https://www.forum.forex
A commodity futures contract is an agreement to buy or sell a particular commodity at a future date. The price and the amount of the commodity are fixed at the time of the agreement.
Most contracts contemplate that the agreement will be fulfilled by actual delivery of the commodity.
Example: If you want to purchase a single July futures contract of ABC Ltd., you would have to do so at the price at which the July futures contracts are currently available in the derivatives market. Let's say that ABC Ltd July futures trading are at $1,000 per share. This means, you are agreeing to buy/sell at a fixed price of Rs 1,000 per share on the last Thursday in July.
You can learn more about forex trading at
https://www.forum.forex