Future market is the most attractive market around the world, because it has an outstanding potential of income and make money, let’s Start Future Market
HOW THE FUTURE MARKET WAS CREATED?
As stock markets were developing, people and companies were entering in markets and lots of humans got rich with a few money. After several years a new market attracted them, a new market which has wonderful features to make more money.From far away, farmers and craftsmen have involved in risk of final price of their products and crops and they really didnâ€™t know when the products will be ready, how much money does it price? For example, a farmer has several tons of wheat, Now He canâ€™t sell any part of his crops, He think that Iâ€™ve paid 10000$ as costs, If I can sell all of my wheat 15000$, I would be satisfied. But now I canâ€™t sell
what’s stock market?
What can I do? He said
at the same moment, there was a baker who thought that he needs several tons of wheat for 6 months later, itâ€™s better to omit the risk of fluctuations, specially when he predict storm can be happen, wheat will be scarce and its price will increase. Then he should purchase all wheat that he needs, but he canâ€™t keep it safe and fresh? It seems impossible.
Then what can I do?
They decided to sign a contract that omitted their risks and helped them to achieve more money. Farmer obligated to deliver 1000 sacks of wheat to baker, and the baker deposited a part of total price as a prepayment.
How did they calculate the price of each sack?
Itâ€™s simple, itâ€™s almost todayâ€™s price.
If the price grew, How did they settle?
The farmer had to deliver at the contract price. If the price was diminished, the baker had to receive at the contract price.
Whatâ€™s other problem?
This contract was signed by the baker and farmer, without any government regulation, there was only one obstacle, if the farmer didnâ€™t deliver wheat or the baker could buy wheat at lower price and he didnâ€™t tend to receive wheat, the other party couldnâ€™t get their loss.
Over time, many people entered to this market,some people like oil trader , copper trader, wheat, farmers and etc used this method for doing their business well..
DEVELOPING OF FUTURE MARKET
After several years, the volume of this contract grew , some people didnâ€™t act like contract, and they ignored the obligation and made the business terrible. Government decided to give the market under supervision, they made a market for this type of contract, standardized them and under direct supervision of government. In this new market, people couldnâ€™t ignore their obligation and refuse to act like contract.
The first contract that wasnâ€™t regulated is forward market. The regulated market that was under supervision of government is future market
ENTER TO FUTURE MARKET
Afterwards, some people who traded in stock markets , sold and bought shares every day and followed the dream of wealth or got a great deal of capital, entered in futures market and beside shares, they traded commodities too. Neither were they farmer nor baker, but they knew well how to use each instrument for making money. How? Trader think the price of wheat will be diminished , then he go to market and signed a contract that after six months he has to deliver 1000 sacks of wheat at todayâ€™s price. Todayâ€™s price is 5 $ and think about it, on delivery day , the price of wheat become 2$. How can he make profit? He buy 1000 sacks of wheat at todayâ€™s price 2 $ per sack, and sell it 5$ per sack, make 3000$ profit. Itâ€™s simple ,no? But nowadays many of contracts become cash settled and there is no need to deliver asset
OUTSTANDING FEATURES OF FUTURE MARKET
- Whatâ€™s the features of future contracts that attract lots of traders to enter in this market and make wonderful money?
The first and the most important feature of the future contract is that you can get profit in price falling. In other word, you can be In the farmer exposure. How? You arenâ€™t farmer and donâ€™t have any wheat, but you enter in a contract and obligate to sell 1000 sacks of wheat on terminate date ( six months later) at todayâ€™s price.
- We deposit a percentage of contractâ€™s value as a collateral , and there is no need to pay total value of the contract
For example if we want to sell or buy 1000 sacks of rice, and the price is 5 $ per sack, we donâ€™t require to deposit 5000$ for trading, we just deposit 100$, but we make profit on total value, 5000$,not 100$.
- these contracts are fully regulated by international supervision entities and governments.They have specific standards, terms and conditions.
- All contracts have maturity dates, from 3 months till several years, but they expire at least. If they want to close his contract before maturity date, he can do this and use cash settlement.
- how is it settled?
We can either deliver commodities or pay the difference between price and settle by cash. It was usually settled by cash
- Which assets can we trade in future market?
- Many of agricultural commodities like coffee, cocoa, wheat, corn, orange juice and etc.
- Livestock like cow, peak , beef
- Industrial commodities and energies like copper, zink, oil, gas and etc
- Precious metals like gold, silver, platinum and etcâ€¦ And thousands of other assets
- Over the history, many people like Jessy Livermore was active in the future market and became the richest man in their ages. Jessy liked to trade in future market, when ha escaped from his town , he started to work in stock broker, learned trading and Technical analysis ,then he became the biggest trader over the history.
Now there are the biggest exchange of future contract in London and Chicago ,and traders transact billions of dollars and get rich every day
Start trading in future market