Futures Market

You don’t have to wait for the future. You can buy it, in a futures market.

A futures market is an auction market (competitive bidding) where investors can buy and sell futures contracts and commodities with future delivery dates.

Sadly, if you’re looking for some old-fashioned, on-the-floor auction action, you won’t find it with most futures markets. Like the stock market and most financial products these days, it’s all electronic, traveling through the interwebs.

Futures markets are full of two kinds of traders: those looking for volatility and those looking for stability. Those who are looking for volatility are speculating, hoping to buy low now and sell high later.

On the flip side are those who are looking for stability: they’re buying futures contracts to lock in current prices at a future date. This is especially key for business dependent on commodities...better to lock in prices now by partaking in a futures market than deal with market volatility.