The are a lot of future trading education courses and materials that can find people online. But how does one go to find the best trading information? Of course there is a large amount of information that will educate and about future trading, but not all of this will help you to achieve your goals, but will be more aware of future trading in more detail.
Future trading is a from of Derivative trading, which is soon gaining preference and acceptability. You can even say that these days it is one of the most common froms of derivative trading, done from all parts of the globe through centralised exchanges.
About Future Trading:
Future trading involves buying selling of a standardised contract to purchase a particular commodity on a certain date and on its current prices and sell it on a certain date or after a definite period and on the specified according to the then market forces, that is the supply amd demand graph.
The chief principle of these future contracts is to conquer or avoid the price fall of the commodity or product at the delivery time by securing the current day prices. These contracts are of two types: Commodity future contracts. In most of the cases, these contracts are not based on tangent assets like stocks, shares, currencies, securities or financial instrument, interest rates and stock indexes.
Terminologies used in this trading:
Whenever you venture out in an alien or new field, the best way to make yourself comfortble and at home in that field is by learning and acquiring the terminologies and lingo used. This field also has some stipulated terminology or jargon. Following are few basic terms used in this trading, which one should be, well varsed with:
1) Delivery date or Settlement date: The future date or the date when the contract ends and you have to sell the underlying commodity is called the settlemen or delivery date.
2) Settlement Prices: This is the official price of the underlying commodity at the end of a day's trading is called the settlement price. This is the price of that particular commodity at the end of a day's business at the exchange.
3) Futures Exchange: This is the exchange where all the trading takes place. It is the futures trading platfrom, where people from all over the world engages in buying and selling of underlying commodities bounded by a contract for a stipulated period of time.
Terms and Conditions of the contract:
1) The trading contract is rigid and cannot be altered or flexed.
2) It crearly states the amount, quantity and type of the underlying commodity purchased.
3) It crearly mentions the present price at which the commodity was purchased and its settlement date and the predetermined price of the commodity.
4) It is margined for minimizing counter party credit risk.
5) It is guaranteed by clearing firms.
6) These are traded openly in the public domains.