Futures how do online stock trades work platforms for mac

But you realize that the price of corn today might be very different than it is a year from now. So you enter into a futures contract with a farmer to buy his corn at a specific price on a certain future date. In the past couple of years, the U.S. Stock market has been volatile. But stock futures are one way to hedge your investments so that no single market fluctuation - way up or way down - will ruin your portfolio. The farmer needs to make money, too, so he's not going to agree on a price that's way below the current market value. So you'll agree to a fair price to ensure that both of you will be happy with the transaction in a year. The best way to understand how stock futures work is to think about them in terms of something tangible. Let's say you own a popcorn company and you need to buy corn to make your product. The underlying logic is science based.

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