Buying And — Selling Futures

: You sell a contract if you expect prices to fall. You profit by buying it back later at a lower price, capturing the difference.

: Futures use high leverage, allowing you to control large positions with a small amount of upfront capital called initial margin .

: Profits and losses are settled daily. Your account balance is updated at the end of every trading session based on the current market price. Leverage and Margins buying and selling futures

: Unlike options, which give you the right to trade, futures are binding obligations. Both parties must fulfill the contract at expiration, either through physical delivery (common for commodities like oil) or cash settlement (common for stock indexes).

: This is the minimum amount required to keep a position open. If your account falls below this level due to losses, you may receive a margin call . : You sell a contract if you expect prices to fall

: While leverage amplifies gains, it also magnifies losses. It is possible to lose more than your initial investment.

: You buy a contract if you expect the price of the underlying asset to rise. You profit if you can sell the contract later at a higher price than your entry. : Profits and losses are settled daily

Futures trading involves entering into standardized legal agreements to buy or sell an asset at a predetermined price on a specific future date. These contracts are used for two primary purposes: , to protect against price volatility, and speculation , to profit from anticipated market movements. Core Mechanics of Buying and Selling