Trading commodities at a fixed price on a future date is known as futures trading. There is no actual buying involved, nor does the trader own anything. Future traders speculate on the future direction of the price of that particular commodity. The terms “buy” and “sell” are used to indicate the direction that future prices are expected to take.
The value of the index multiplied by a specified monetary amount is defined as its value. For instance, the value of a contract is defined as $x multiplied by the value of the futures contract. 선물옵션
Margins are given to traders based on the position of the commodity. The futures contracts are settled in cash. This implies that actual delivery of the index cannot be made. The difference between the cash and the futures index on the date of settlement is the profit or loss for the traders.
Futures trading index has reduced the volatility in the underlying index. Market analysts try to predict the changes of the broad market indices. As the index cannot be traded, they try to capture the relation between the index and individual commodity. The futures contract index gives them an opportunity to actually buy into the components of the index.
Futures trading index provide traders an easy and cost-effective means of trying their hands in futures trading. The introduction of futures trading index is good for the market as long as unwarranted speculations are not made.
Only recognized exchanges are allowed to trade futures contracts. All the principles of trading remain the same except that the contracts are adjusted to the market values every day.
Futures trading index is also provided on various websites. They create their own specific indices according to their own market analysis. One of such websites is wallstreetcourier.com. It has it own index with indicators showing the best time to buy or sell, depending on the market conditions.