With a futures contract, the buyer has an obligation to buy an asset (or the seller to sell an asset) at a particular future date and price. Futures contracts are usually based on commodities or other asset merchandise (stocks, currencies, other assets). Some futures contracts may require physical delivery of the asset, while others are settled in cash.
Futures can be used either to hedge or to speculate on the price movement of the asset merchandise it represents. For example, a producer of corn could use futures to lock in a certain price and reduce risk (hedge). On the other hand, anybody could speculate on the price movement of corn by buying (going long) or selling short using futures.
Compared to stocks and even options, futures are characterized by the ability to use very high leverage and thus high stakes. Direct trading in futures is a game usually reserved for advanced traders, CTA investing professionals, investment banks and corporations.
Common investors can invest with futures through a CTA (Commodity Trading Advisor) who will operate a managed futures account for the investor.
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Exponential Moving Average,
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