BikoTrading Academy

Futures (futures contract)

Futures (futures contract) – a special instrument used on an exchange. It allows to buy or sell any asset in the shortest possible time. In this type of transaction, both parties only agree on the price level. As for the other characteristics of the asset, they are already fixed in the contract. There are two types of futures: deliverable and settled. The first type deals directly with stocks, commodities and raw materials. The second variant concerns indices. In such contracts there are only currency settlements between the parties in the amount of the difference between the opening and closing price of the position. This instrument is used so that there is no single risk in which the price can change accidentally or intentionally.