Futures is a financial instrument, which represents the future agreement transaction of commodities or financial assets. Unlike stocks, futures are based on contract markets, including agricultural products, metals and energy. Its purpose is to hedge market risks, but also for investment and trading. Futures are usually leveraged, that is, you can control a large number of commodities by paying a small margin. Traders can earn the difference by buying futures, or they can boldly sell futures through deficits.

The scope of futures is very wide. We can take oil futures as an example. If you think oil prices will go up, you can buy oil futures contracts. In this case, even if the actual oil price does not rise, the market demand may lead to an increase in futures prices, thus making you profitable. On the contrary, if you think that oil prices will fall, you can choose to sell oil futures contracts, so that even if oil prices are still rising, you can still make a profit.

Unlike stock investment, futures investment is relatively risky. Because futures are highly leveraged, they only need to pay a small amount of margin, which means that once the price fluctuates, the loss will be very fast. On the other hand, futures also have its advantages. For example, the market information of futures is relatively transparent and the trading liquidity is high. Many markets are conducted on exchanges and standardized. In addition, compared with the stock market, the futures market is more flexible, and traders can realize risk management and capital utilization through various means.