Buy Futures Contract Example -

Profits and losses are calculated and settled in your account at the end of every trading day.

Buying a futures contract does not require paying the full value of the asset upfront. Instead, you post a , which is a small fraction (typically 3–12%) of the contract's total "notional" value. buy futures contract example

If corn drops to $4.00, they are still obligated to pay the contract price of $5.00. While they lose money on the contract, they benefit from lower costs in the physical market, "locking in" their budget. Buying Example: The Individual Trader (Speculation) Profits and losses are calculated and settled in

Every contract specifies the exact quantity and quality of the asset (e.g., one crude oil contract covers 1,000 barrels). you post a