Trading in Futures/ Derivatives

Marketopedia / Trading in Futures/ Derivatives

Trading in futures and derivatives is a unique way to speculate on price movements, manage risk, and diversify their portfolios. Unlike traditional stock trading, which involves the buying and selling of actual shares in a company, futures and derivatives trading centres on contracts that derive their value from underlying assets, such as commodities, currencies, or financial instruments. These contracts, known as futures or derivatives, enable traders to profit from price fluctuations without owning the underlying assets. Futures markets provide opportunities for both hedging and speculation, making them essential components of the global financial ecosystem. In this realm, traders can leverage advanced strategies, including options, swaps, and futures contracts, to navigate market volatility, enhance returns, and mitigate potential losses.