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there are two types that are part of the commodity futures market. A normal futures market is one where the price of the nearby contract is less than the price of the distant futures contract. The other is an inverted futures market, the price of the near contract is greater then the price of the distant contract.
One can own a stock, but trading futures requires one to contract for the futures. Buying stocks gives you ownership (or your own share) in a part of the company that you're buying into. Trading futures, one enters into a contract for a particular commodity instead of actually buying into it. You can then contract to be a buyer or a seller of that commodity.
there are two types that are part of the commodity futures market. A normal futures market is one where the price of the nearby contract is less than the price of the distant futures contract. The other is an inverted futures market, the price of the near contract is greater then the price of the distant contract.
The only difference between a long call option and a long futures position is the derivative itself--one of them is an option, the other is a futures contract.
A heating oil futures contract is 1000 US barrels, or 42,000 gallons. A semi with a oil tank holds 5,000 gallons, so one futures contract equals seven truckloads of oil.
The Chicago Board of Trade's DJIA Futures contract is a futures contract on the entire Dow Jones Industrial Average. This one's REALLY weird, so hang on:The value of this contract is 10 times the Dow Jones Industrial Average. If the Dow is 10,000 today, the price of a futures contract on it is $100,000.Next, on the date of settlement cash is delivered, not 300 shares of stock.Third, this futures contract requires daily settlement payments, and this is why the DJIA futures contract is so weird. You and I are counterparties to one of these things. You're the futures buyer, or the long; I am the futures seller, or the short. The Dow was at 9000 when we did the deal, so you paid me $90,000, which went into my brokerage account. If the Dow closes tomorrow at 9010, I have to pay you $100--ten times the delta in the Dow. Similarly, if the Dow closes tomorrow at 8990, you pay me $100.
E-mini is a stock market index futures contract traded on the Chicago Mercantile Exchange. The notional value of one contract is US$50 times the value of the S&P 500 stock index.
There's one main difference and it's huge: An option contract gives the person who buys it the privilege of doing whatever it is the contract is written for. A futures contract imposes an obligation on the buyer. There are also liquidity requirements and requirements to pay performance bonds in futures trading that don't exist in options trading, but the real basic difference is that an options buyer can do something and a futures trader has to.
Foreign Exchange (Forex) is everything that has to do with converting one currency to the other. You often see foreign exchange market, foreign exchange transaction, foreign exchange rate. Foreign exchange rate is simply a rate at which you can convert one currency to the other, a price of one currency expressed in the other currency. For example if you see EUR/USD 1.30, this means you can buy one Euro for 1.30 US Dollars. 1.30 is the eur/usd forex rate. Futures are financial contracts that set the price for delivery in the future. There are futures on almost all asset classes, including currency. An example of currency future would be a contract to sell 1 Million EUR against USD for a price (rate) of 1.30 USD per EUR in 3 months.
The currency futures can be used by a corporation to exchange one currency for another at a specified date in the future at a price that is fixed on the purchase date. It is also called foreign exchange future or FX future.
An index future is a "cash-settled futures contract on the value of a particular stock market index". Index futures are used in investments, trading, and hedging.
Information on Emini futures trading can be found on the website Trading Concepts which explains the nature of a futures contract, and how much it costs to complete the trading. Detailed information could also be found by consulting a financial adviser.