A futures hedge is a way of reducing business risk while still making a profit on an investment by entering into two trades that are correlated, opposite in direction, equal in quantity and offsetting in profit and loss.
Futures speculation is the use of futures trading provides the role of margin trading mechanism and T + 0 trading mechanism plus very low commission these three advantages, in order to obtain a small price jump in the plate for the purpose of the trading method.
A futures is a standardised tradable contract on a commodity or financial instrument. The underlying may be a commodity such as agricultural products, crude oil, gold or a financial instrument.
