You buy a contract because you think the price will go up .
When you buy a futures contract, you aren't getting the physical item delivered to your house today. You are agreeing to a price for a transaction that happens later [2, 5]. buying futures for dummies
Most retail traders "close out" their position before the contract expires so they don't end up with 1,000 barrels of oil on their lawn [2, 5]. You buy a contract because you think the price will go up
Buying futures is basically like making a "pinky swear" to buy or sell something (like oil, gold, or wheat) at a specific price on a specific date in the future [2, 5]. Unlike buying a stock, where you own a piece of a company, a futures contract is a bet on which way a price will move [1]. Here is the "for dummies" breakdown of how it works: 1. The Core Concept: The Agreement Most retail traders "close out" their position before
You buy a contract because you think the price will go up .
When you buy a futures contract, you aren't getting the physical item delivered to your house today. You are agreeing to a price for a transaction that happens later [2, 5].
Most retail traders "close out" their position before the contract expires so they don't end up with 1,000 barrels of oil on their lawn [2, 5].
Buying futures is basically like making a "pinky swear" to buy or sell something (like oil, gold, or wheat) at a specific price on a specific date in the future [2, 5]. Unlike buying a stock, where you own a piece of a company, a futures contract is a bet on which way a price will move [1]. Here is the "for dummies" breakdown of how it works: 1. The Core Concept: The Agreement