Futures and spot are completely different. Spot is actually a tradable commodity. Futures are mainly not commodities, but standardized tradable contracts with certain mass products such as cotton, soybeans and oil and financial assets such as stocks and bonds as the targets. Therefore, the subject matter can be commodities (such as gold, crude oil and agricultural products) or financial instruments.
The delivery date of futures can be one week later, one month later, three months later or even one year later. A contract or agreement to buy or sell futures is called a futures contract. The place where futures are bought and sold is called the futures market. Investors can invest or speculate in futures.
Futures market first appeared in Europe. The object of futures trading is futures contracts, not physical objects. Therefore, futures investors can make physical delivery or cash delivery when the contract expires. As far as physical delivery is concerned, one party pays cash and the other party hands over the goods of the specified specifications agreed in the contract, which is the same as the forward transaction; The difference is that futures contracts can be closed before the contract expires to reverse the original transaction. So the liquidity of futures trading is relatively strong.