Alpari Futures

• Commodity Guide

New To Futures

What is a Futures Contract?

A futures contract is a legally binding agreement to buy or sell a commodity or financial instrument at a later date. Futures contracts are standardized according to the quality, quantity, and delivery time and location for each commodity.

What is an Option Contract?

A contract which gives the buyer the right, but not the obligation, to buy or sell a specified quantity of a commodity or a futures contract at a specific price within a specified period of time. The seller of the option has the obligation to sell the commodity or futures contract or to buy it from the option buyer at the exercise price if the option is exercised.

Who Trades Futures and Options?

Futures ans Options traders are traditionally placed in one of two groups:

1. Hedgers: those who have an interest in the underlying commodity and are seeking to hedge out the risk of price changes
2. Speculators: those who seek to place trades by predicting market moves and buying a commodity "on paper" for which they have no practical use.

What are the trading hours, margins, and fees for US futures exchanges?

*CBOT & NYMEX are part of the CME Group

What are the risks involved with trading futures and options?

The risk of trading Futures and Options on Futures can be substantial. Each investor must determine if this type of investment is appropriate for them. Past performance is not indicative of future results.

Please read the brochures provided below to find out more about the risk involved with trading futures and options on futures.

Opportunity and Risk: Trading Futures and Options

Glossary

Additional Educational Links

Equity Index Futures

Metal Complex

Energy Complex

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