Types of Futures Trading Contracts

There are mainly two types of futures trading contracts. They are futures contracts which are traded for physical delivery, known as commodities and futures contract which are end with a cash settlement, known as financial instruments. Both types of futures contracts are traded electronically and directly.

Futures contracts which are traded for physical delivery includes agricultural commodities like wheat, oats, sugar etc, energy products like crude oil, heating oil, natural gas etc, or animals. Note that very commodity futures contracts actually end in delivery. Often these contracts are traded just like shares of a stock market, according to the changes in price trends. Online futures traders include both speculators and hedgers.

Futures contracts which are traded for cash settlement involve treasury notes, bonds, etc. These futures are also known as currency futures and are often traded just like commodity futures though electronic platforms.

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