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What does futures mean? Explain briefly.
Futures refers to a contract transaction that is delivered or settled at an agreed price on a future date. At this time, the price, quantity and time of the transaction are mutually agreed. Compared with other financial trading tools, futures is a more complicated and risky investment method, but it is also an investment opportunity to get rich returns.

There are two basic forms of futures trading, one is spot delivery and the other is cash agreement delivery. In spot delivery futures trading, both parties will collect the payment from the seller, while cash agreement delivery is to convert the profit and loss into cash settlement when delivery is made on the agreed date. Another leverage effect of futures trading is that it can be traded with small margin. In this way, when the market fluctuates in favor of traders, traders can get more profits.

Application fields and risk management of futures trading

Futures trading can be conducted in commodity, securities and exchange rate markets all over the world, including agricultural, forestry and animal husbandry products such as gold, crude oil and soybeans, as well as various financial indexes and stock futures. Although futures trading has its potential profit opportunities, it is also accompanied by high risks. This high risk can be limited by risk management tools such as hedging. Therefore, only by understanding and mastering the knowledge and skills of futures trading can we make investment and risk management according to our own risk tolerance and personal needs.