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Futures

In one line: A contract to buy or sell something at a set price on a future date.

Futures started with farmers and buyers fixing prices in advanceShows how many stocks rise versus fall.. Today there are futures on oil, gold, indices, interest ratesThe price of borrowing money. and crypto.

In simple words: you agree today on a price for a deal that happens later. Futures use Margin, so they are leveragedBorrowed power: control a big position with little money..

History lesson: on 20 April 2020 the May WTI crude oil contract settled at minus 37.63 dollars a barrel. It was the first negative price in its history (CFTCThe US regulator for futures and derivatives. interim report). Contracts can do strange things close to their end date (expiry).

Related

Sources & studies

  1. CFTC Glossary
  2. CFTC: Interim staff report on WTI crude oil futures, 20 April 2020
  3. Investopedia (secondary): Futures

MarketsMarginContango and backwardation

Last checked: 2026-11-04 · Educational, not financial advice.

Education only, not financial advice. No signals. Backtests are hypothetical: real trading can be worse. Past results don't predict future results.