We all want an additional source of income to supplement our primary income. Be it establishing a business, buying shares, investing in a business, or trading in the stock market. Rowan Relton stated that the sole aim is to make a profit and get more money. Rowan Relton is an Australian international trading professional with more than 10 years of experience.
A way of trading in the stock market is futures trading. It is used in stock and commodity trading and only experts can do futures trading.
What is Futures Trading?
To trade in futures, traders need to have futures contracts. Futures contracts are agreements signed for trading at a later date with a fixed rate, says commodity trader – Rowan Relton. It may be commodity trading, the farm produces trading, shares, digital currencies, and many more. It involves two parties and each has to accept the terms and conditions. They have to specify the number of goods to be delivered and the money to be paid on a particular day.
Futures trading is done by finance professionals like those who wish to invest, the suppliers, and buyers.
Stocks that are marketed on futures are cocoa, cotton, soya beans, grains, oil, and many more.
What to Expect as a Futures Trader
A futures trader can negotiate prices of goods or shares with sellers before the prices are fixed. This type of trading prevents traders from being affected by price volatility in trading. They are protected from price inflation or deflation.
Take this scenario; you are interested in buying corn with futures trading. You've seen a seller to buy from. You contact the seller, make futures treaties, and set a percentage and quantity. You propose to purchase 1kg of corn for $100 every month for a year. Three months later, the cost of corn increased to $150. It won't affect you because you and the seller have agreed to a cost of $100.
On the other hand, if the cost of corn decreases to $50, it won't affect the corn-seller. You have to pay the seller the fixed cost of $100.
In both scenarios, the seller or the buyer will be protected one way or the other.
Futures investments are for those interested in earning incomes if the cost of goods fluctuates. They want to use stock value and exchanges to make profits. The opportunity is there and numerous because many people trade every day.
