Futures Trading

Futures Trading

A futures is a standardized order to buy or sell allowances at a predetermined price and time in the future


Advantages:
  • A futures contract eliminates the price risk by fixing the price of the allowances in advance
  • It guarantees a multiple level of security since the allowances are negotiated on a regulated market and insured through clearing houses

Aim:
  • Futures are utilized to hedge exposure to price changes and for budget planning