Futures Contracts and Futures Trading Basics

In this section

• What a Futures Contract Is
  Understand futures contracts as standardized exchange-traded agreements used for hedging, speculation, and price discovery.
• How Futures Differ from Options
  Compare futures and options by obligation, margin treatment, contract structure, and payoff profile.
• How Futures Markets and Exchanges Work
  Learn how futures exchanges and clearinghouses support standardized trading, price discovery, and daily settlement.
• Basic Mechanics of a Futures Contract
  Understand contract specifications, margin, settlement, and the operational mechanics of futures trading.
• Using Futures for Hedging and Speculation
  Learn how futures contracts are used to hedge price exposure or take directional market positions.
• Key Risks in Futures Trading
  Understand the main risks of futures trading, including volatility, leverage, liquidity pressure, and margin calls.