Hey all, can someone explain how forex futures work. Are they a way to predict future price, or or they an “If then” order that your waiting on that price to hit. Just curious cause i see them talked about on CNBC. Thanks, love the site!
Futures are contracts for the delivery of something (or the cash equivalent) in the future. For example, if I go long Gold futures at $1000 I have entered into an agreement today to purchase an amount of Gold at $1000/oz at a predefined time in the future.
I created a guide to futures trading a while back for those interested.
say u were long gold and it went to 1500 an ounce you are still able to get your price at a 1000 and instantly make the 500 an ounce?
Exactly. Of course, the market will adjust along the way to the cash price so you could close your long by doing an offsetting short - so to speak.
no kiddin, thanks for lighting the light bulb!!! Are futures only for the big dogs
No. But because of fixed contract sizes, you probably need at least $5000 to get started with a decent chance of sticking things out, even with mini contracts.