How Do Futures Contracts Work?



Next video:
Loading the player...

Futures contracts are one of the most important financial innovations in history, but they are often misunderstood. Find out how this contract is used to transfer risk between different parties.

In This Series

  1. An Introduction To Mutual Funds

  2. What Are Stocks?

  3. An Introduction To The Balance Sheet

  4. Prioritizing Debt

  5. What Is Inflation?

  6. Understanding The Time Value Of Money

Related Articles
  1. Investing

    Explaining Economies Of Scale

    Is bigger always better? Learn about the important and often misunderstood concept of economies of scale.
  2. Trading

    Futures Fundamentals

    This tutorial explains what futures contracts are, how they work and why investors use them.
  3. Tech

    Are Smart Contracts the Best of Blockchain?

    Smart contracts may be one of the best innovations to accompany blockchain development.
  4. Investing

    A Quick Guide for Futures Quotes

    Here is a quick guide for reading and understanding futures markets quotes.
  5. Trading

    Stock Futures vs. Stock Options

    A quick overview of how stock futures and stock options work and why you would pick one over the other depending on the strategy being used.
  6. Trading

    Forward Contracts: The Foundation Of All Derivatives

    An investor can assess interest rate parity and implement covered interest arbitrage by using a currency forward contract to generate risk-free returns.
  7. Investing

    Fueling Futures In The Energy Market

    The energy market influences every aspect of our lives, and these four options are its driving force.
Hot Definitions

  1. Socially Responsible Investment - SRI

    Socially responsible investing looks for investments that are considered socially conscious because of the nature of the ...

  2. Business Cycle

    The business cycle describes the rise and fall in production output of goods and services in an economy. Business cycles ...

  3. Futures Contract

    An agreement to buy or sell the underlying commodity or asset at a specific price at a future date.

  4. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...

  5. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...

  6. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
Trading Center