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Russell 2000 Futures

Excavating the way how Futures Trades work?

A future contract is a contract which is valid when an asset or an agreement is agreed to be sold on a specific date and at an agreed price. The deal takes place between two entities mainly a buyer and a seller. These contracts are known as standardized agreements that typically trade on an exchange. One party buys a given quantity of securities or a commodity and takes delivery on a certain date and the other party provides it.

Futures trading are done on a margin basis that is it is traded on a date in the future. It is all a part of the assumption as you will be assuming the price of the shares or stocks in the near future. You can buy any number of shares that you want to but the entire value is not required to be paid at once. Unlike other forms of contracts futures require a marginal amount of shares to be paid for the stock.

Factors attached to futures contracts are:

  • Risk (Huge risk is associated with these contracts)
  • Margin and Leverage (The margin and the leverage need to be dealt with correctly)
  • General Economic Condition (The economic condition has an impact on the futures market)

There are other factors that affect these contracts but these are some of the major ones that can have fruitful as well as devastating results.