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					Title:
Futures Trading

Word Count:
285

Summary:
All futures contracts are generally made for the purpose of speculation
or hedging. As such, the general procedure for settlement is the
neutralization of the original contract by an opposite contract on
settlement, so that only difference between the current and the contract
price is paid or received. It is rare that actual delivery of the goods
is taken, and the price paid in settlement of futures contracts.


Keywords:
Futures Trading, Online Futures Tradings, Futures Trading Software,
Commodity Futures Tradings


Article Body:
All futures contracts are generally made for the purpose of speculation
or hedging. As such, the general procedure for settlement is the
neutralization of the original contract by an opposite contract on
settlement, so that only difference between the current and the contract
price is paid or received. It is rare that actual delivery of the goods
is taken, and the price paid in settlement of futures contracts.

Futures trading is the most notable feature of business activity on the
commodity exchange. In fact, the commodity exchanges are organized mainly
for futures contracts. The futures contracts are made for two distinct
purposes: speculation and hedging. Accordingly, they are either
speculative or hedging contracts. Speculative activity is such an
important part of the commodity exchanges that commodity exchanges are
sometimes referred to as the speculative market.

All speculation represents an attempt on the part of individual to peep
far into the future out of the window of the present. Speculation refers
to an attempt to estimate the future trend of prices and proceed on that
basis, to result in profit. Commodities may be bought at the current
price with the assumption of selling them at a higher price in future or
vice-versa.

The line between gambling and speculation is very thin. On the surface
both appear to be the same, but in fact speculation refers to the taking
up of legitimate enterprise (purchase or sale of property, commodities,
etc.) on the basis of an analysis of market trends and other factors that
have a bearing on prices. When, however, people start speculating
recklessly and blindly without applying their mind and intelligence, and
without possessing the resources necessary to meet their commitments, it
degenerates into sheer gambling.

				
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