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Most retail traders "close out" their position before the contract expires so they don't end up with 1,000 barrels of oil on their lawn [2, 5]. buying futures for dummies
If the price moves against you even a little bit, you can lose your entire investment—and sometimes more—very quickly [1, 2]. 3. Hedgers vs. Speculators There are two types of people in this market: AI responses may include mistakes
Decide if you want to trade commodities (gold, oil), currencies, or stock indices (like the S&P 500) [1, 5]. If the price moves against you even a
Farmers or airlines who want to lock in prices so they don't get screwed by market swings [5].
Traders (like you) who have no interest in the actual corn or oil; they just want to profit from the price changes [5]. 4. How to Start
This is the biggest difference from stocks. You don't have to pay the full value of the contract upfront. You only put down a small deposit called (usually 3–10% of the total value) [1, 2].