The Basics of Futures Trading

futures trading

Futures trading is a great way to diversify your portfolio. It also provides you with direct exposure to underlying assets such as oil and precious metals.

There are two types of traders in futures 원자재선물 markets – hedgers and speculators. Hedgers use futures to protect their businesses against fluctuations in commodity prices.

Speculators make money by using futures contracts to magnify relatively small price changes. This is the main reason why most speculators borrow a substantial amount of money to trade.

The Importance of Risk Management in Futures Trading

The first step in futures trading is picking the right market to trade. This requires a significant amount of research to identify the market you’re interested in and understand its fundamentals and economic trends.

Once you’ve identified the market you want to trade, it’s time to choose a contract. This can be done through a live broker, an automated online futures platform, or a trading app.

After you pick a futures contract, it’s time to place an order. This can be done via a market order or a Market-on-Close (MOC) order, which is an order that guarantees execution at the closing price of the day.

The price you pay for a futures contract depends on its expiration date and the relationship between supply and demand. For example, if you enter a contract to buy crude oil in the future and the price drops before it expires, you’ll incur a loss. But if the price of oil rises before it expires, you’ll make a profit.

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