Every trading instrument has strengths, but those strengths only matter when they match a trader's objectives. Futures contracts are no exception. While they are widely used by professional investors and commercial businesses, they are not automatically the best choice for every situation. Understanding when futures trading makes practical sense begins with understanding what these contracts are designed to accomplish. Futures markets exist for more than speculation. Manufacturers, airlines, farmers, and investment managers all use them to manage exposure to changing prices. Individual traders participate in the same markets, but often with different goals. When You Need Exposure to a Specific Market Some markets are more easily accessed through futures than through other financial products. Major stock indices, energy products, agricultural commodities, government bonds, and industrial metals all have active futures markets with standardized contracts and transparent pricing. For ...
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