Futures Trading For Beginners : What Makes Futures Contracts So Attractive?

1536 Words Jan 5th, 2016 7 Pages
Futures Trading for Beginners

What makes futures contracts so attractive?
Do you want to earn a stable income, but at the same time, be brave enough to take risks? Do you want to insure your assets and try your hand at trading on financial market? Do you have good business instinct? Are you interesed in world news? In this case, it is mandatory for you to know what is a futures contract. Futures contracts are unique invention, created to simplify the business life and make a high profit. Using futures, producers of goods can insure their products for years to come and portfolio managers can reduce the risks specific to their profession. Any successful futures contract has a crucial function: it meets the needs of a market. инфографика? What is a Futures Contract?

Futures contract is an agreeement to sell or to buy an asset for a determined price at some point in future. A buyer knows that at a certain date an asset will be available at this very price. However, after signing the contract, both parties became bound by the obligations. Even if the price goes up and the seller will have the opportunity to sell an asset at a higher price, the contract is binding.

History of Futures</ h3>

The first centralized exchanges formed in Chicago in the 1800s. They helped to stabilize strong price fluctuations, which arose because of farm surpluses (for example, a farmer who has grown wheat, did not have a repository for such a large number of products) or, on the contrary,…

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