“Wait, what exactly is futures trading?”

If you’re new to trading, you’ve probably heard the word “futures” and thought… futures of what, exactly?

Well, it’s simple. Futures trading means agreeing to buy or sell something at a set price on a future date.

Let’s say you believe gold will go up next week. Today, it’s $2,300 per ounce. You open a “buy” futures position. If gold rises to $2,350? You profit $50 per ounce. If it drops? You lose.

You’re not buying the actual gold. You’re trading a contract based on gold’s price.

Why do people trade futures?

• To make profits on price moves (that’s us, the traders!)
• To hedge price risk (like airlines protecting against oil price surges)

Futures are used for all kinds of assets: indices (like Nasdaq), gold, oil, forex, and even crypto.