Futures Market Trading

When we discuss the futures trading market, it is essentially this auction market where the participants can buy as well as sell commodities as well as futures contracts for delivery on a specific future date. The futures, in this case, are exchange-traded derivatives contracts that lock in the future delivery of a commodity or even security at a price set throughout the day.

The contracts are traded by the participants that are interested in buying or selling the derivatives, and in the case of U.S. futures markets, they are regulated by the commodities futures clearing commission or (CFTC) with futures contracts that are standardized by the exchanges themselves. These contracts are typically made by producers as well as suppliers of commodities as a way of avoiding market volatility, as they negotiate contracts with an investor that agrees to take on the risk as well as the reward of a volatile market.