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Futures Trading Fundamentals and Strategy

Futures Trading Fundamentals and Strategy »

The futures market is an organised exchange in which futures contracts are bought and sold. Futures contracts may be used by hedgers to transfer, to another party, a risk exposure associated with an underlying financial transaction. The ‘other party’ may be a speculator who takes a position in the market based on their expectations about changes in the price of the contract during the period through which they hold the contract.
A hedger will enter into a futures contracts today at a price based on the underlying physical market product. At …