Futures trading What are futures? Futures are future contracts for a particular commodity. Future contracts for goods are called commodity futures, those for shares, bonds, indices and currencies are referred to financial futures. Depending on whether they are as short or long positions, they oblige the purchaser of the contract to deliver or buy a certain quantity and quality of a fundamental base value at a particular time in the future at the price agreed.

Benefit from leverage

The buyer (long position)
is obliged to buy or accept a certain quantity of goods at a previously agreed price on a future date (the end or expiry date).

The seller (short position)
is obliged to deliver at these terms. It is possible to enter sale or purchase positions on the stock exchange at any time. The speculator is not interested in receiving the goods and will settle his position before the end or expiry date. Balancing the results of these two positions produces a financial profit or loss.

Examples
You believe that the DAX index will rise in the near future. You buy a DAX contract, e.g. at 5100 points. The DAX rises as expected to e.g. 5120 points.

You want to realise the profit and settle your selling position by now selling a DAX contract (bought at 5100 and sold at 5120).

Each point in a DAX contract is worth €25.00

The difference between the purchase and sale is 20 points. 20 times €25.00 = €500.00 profit

You believe that the DAX index will rise in the near future. You buy a DAX contract, e.g. at 5100 points. But the DAX falls e.g. to 5080 points

You want to realise the loss and settle your selling position by now selling a DAX contract (bought at 5100 and sold at 5080).

Each point in a DAX contract is worth €25.00. The difference between the purchase and sale is 20 points. 20 times €25.00 = €500.00 loss