Futures Trading: What It Is And How It Works

The College Investor Audio Show · Jul 3, 2020 · 7m

Futures trading is an investing activity typically reserved for speculators or companies that are looking to hedge against the future price of their products. However, any individual investor with a margin account can participate in futures trading.

When you buy a futures contract, you are essentially locking in the price of the underlying asset or commodity. As a seller of a futures contract, that means you have a guaranteed selling price for your goods. And, as the buyer, you have protection against price increases.

Those who trade futures can also take big advantage of small price…