speculate on its price movements. They can simply enter their trade with a
smaller amount of cash on margin.
Futures contracts are traded on an exchange, and their price typically
moves with the price of the underlying asset. Since traders are speculat
ing on a future price of an asset, the futures price can be slightly higher or
lower than the spot price.
All futures contracts have specifi expiration dates that vary by the as
set class on which the futures contract is based.
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you believe the price is going to increase. Instead of buying physical
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PS
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For a trader, using futures on margin is a lot more convenient than
actually buying and holding physical goods.
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.net.
Stock Index Futures
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buy an entire index on margin, which is much more convenient.
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of a futures contract is good only until the expiration date, on which the
particular futures contract can no longer be traded.
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option an assumption is made that at the end of the day the futures price
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