Future market refers to the market in which commodities, securities and foreign currencies can be bought or sold. The current rate for purchasing goods is used. However, the future rate will determine what rate those items, securities, or foreign currencies will have. They are not fixed until a later date. As a stock exchange, this rate changes every day.
Let’s say I go to the markets to buy a cooler of 3000. Thinking that it would cost Rs. to buy a cooler with 3000 litres of water, I purchase it. It is possible to make it happen. This was even more. On Tuesday, the futures market will see Rs. Have 5000. My Rs. 2000 survived if we accept that the cooler costs Rs. If I accept that the cooler will cost Rs. 2000, then I would get Rs. It was worth 1000. This market type is known as a future or forward market.
National Multi Commodity Exchange of India Ltd. is the largest future market example in India.
Contract Month: The future contract is the same as in the options market, except that they are only valid for a specific period. These contracts are delivered, and they will either expire. The delivery of a Contract takes place during the month. Also, the delivery month is called the contract month.
Option on Future: This option allows the holder to invest and has the potential to enter into the forward contract. The option holder would buy assets at the futures price. Investors could also enter into the future contract to shorten the options and then sell the assets at the future price.
It can seem complicated and risky to sell or buy commodities in this market. This is a global marketplace where you can buy and sell commodities spot or future delivery. The future market buys and sellers future contracts at a price per unit of the commodity, as well as the type and quantity. Hedgers and speculators are the two main players in the futures market. In hedgers, they work to minimize risk and avoid declining prices. Speculators try to make a profit by selling or buying.
