Michael L835 Martinez#99

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What is a futures contract in trading?

A futures contract is a standardized agreement to buy or sell an asset at a specific price and date in the future. Futures are widely used in commodities, indices, and currencies. They allow traders to speculate on price direction or hedge existing positions. Futures are traded on regulated exchanges, offering transparency and liquidity. Unlike CFDs, futures have expiry dates and margin requirements. They can provide leverage but carry high risk if not managed properly. Professional traders use futures for both speculation and risk management.