What does a futures contract mean?

Futures are mainly not commodities, but standardized tradable contracts with cotton, soybeans, oil and other popular products and financial assets such as stocks and bonds as the target. Therefore, the subject matter can be commodities (such as gold, crude oil and agricultural products) or financial instruments.

The delivery date of futures can be one week later, one month later, three months later or even one year later. A contract or agreement to buy or sell futures is called a futures contract. The place where futures are bought and sold is called the futures market. Investors can invest or speculate in futures.

Futures market first appeared in Europe. As early as ancient Greece and Rome, there were central trading places, bulk barter transactions, and trading activities with the nature of futures trade. The original futures trading was developed from spot forward trading. The first modern futures exchange 1848 was established in Chicago, USA, and 1865 established a standard contract model.

Extended data:

main feature

1. Product variety, trading unit, contract month, deposit, quantity, quality, grade, delivery time, delivery place, etc. The terms of futures contracts are established and standardized, and the only variable is the price. The standards of futures contracts are usually designed by futures exchanges and listed by national regulatory agencies.

2. Futures contracts are concluded under the organization of the futures exchange and have legal effect, and the price is generated through public bidding in the trading hall of the exchange; Most foreign countries adopt public bidding, while our country adopts computer trading.

3. The performance of futures contracts is guaranteed by the exchange, and private transactions are not allowed.

4. Futures contracts can fulfill or terminate their contractual obligations through the settlement of spot or hedging transactions.

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