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What is futures trading? Introduction of various contracts and future transactions

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What is futures trading? Introduction of various contracts and future transactions

Familiarity with futures trading Futures are known as one type of futures trading, in which two parties to the contract, i.e. the buyer and the seller, agree to trade an asset at a specified price at a future time. In this type of trading, you enter into a buy or sell transaction by predicting the future price of an asset without owning it. If your prediction is correct, you will take your profit and exit the market at the appointed time. Otherwise, you must pay the agreed price to the other party.

What is futures trading?

Suitable markets for futures trading

  • goods
  • Digital assets
  • Oil
  • gold
  • take stock
  • Interest rate
  • Food products
  • Currencies

Types of futures transactions Futures transactions

  • Futures contract with maturity
  • Futures without maturity
  • Future transaction with maturity

In the futures contract with maturity, the buyer and the seller undertake to complete the transaction on a certain date and with a certain amount. At the time of maturity, price fluctuations have no effect on the agreement made and the parties must fulfill their obligations. In the future transaction without maturity or maturity, the price of the asset is determined; But the delivery time is unknown. This type of contract is very popular among traders.

Settlement methods in futures transactions

One of the features of futures transactions is the variety of settlement methods. Buyer and seller can choose one of the available methods according to their needs. These types include the following:

  • Cash settlement
  • Physical settlement
  • Combined settlement
  • Non-standard settlement

According to the need and situation of the transaction, any of these methods may be chosen. For example, in cash settlement, the transaction amount is calculated and paid based on the difference between the daily price and the price mentioned in the contract, which is very suitable for trading currencies, natural resources, and consumer goods. While in physical settlement, the seller must deliver the traded asset to the buyer on a specified date and receive the agreed amount, which is used for oil, gold and agricultural products transactions.

Examining the advantages and disadvantages of futures transactions


Risk management: One of the main advantages of trading futures is the possibility of better risk management. By using this method, companies and investors can significantly reduce market risk and prevent possible frauds.

Bilateral transactions: In futures transactions, it is possible to buy and sell assets in both directions of the market. This feature allows users to profit from the market in any condition.


Liquidation: One of the main disadvantages of futures trading is the risk of liquidation. Some investors may make big mistakes due to the use of leverage or margin, which can lead to the loss of their entire capital.

Leverage and Margin: Improper use of leverage and margin can bring serious risks to investors. These features, if used incorrectly, can damage your capital and even lead to its loss.

The difference between futures and spot transactions

The difference between futures and spot transactions

One of the important differences between futures and spot trading is that each has its own features and facilities, which makes some investors and traders prefer to trade futures.

Leverage in the futures market

You can enter into a transaction by paying a small part of the amount of an asset and using leverage; But in a spot trade, this is not possible and you can only buy as much as you own, such as Bitcoin.


In spot mode, you only profit from buying an asset when its price increases; But in futures, you can also profit from falling markets. For example, if the price of Bitcoin drops from $1,000 to $500, you cannot make a profit in spot trading; Because only when the price increases, your capital becomes more valuable; But in futures trading, you can predict the price and go short.


Liquidity in futures market is more than spot; Because many traders prefer to participate in bilateral trades and earn profit from the market in any situation. Note that the higher the liquidity of the market, the lower the risk of transactions.

Why trade in futures?

As mentioned, futures trading is very suitable for companies and people who have high knowledge and experience; Because they can manage investment risk and increase profitability. Also, Iranian users can take advantage of Valex’s accrual trading market to carry out leveraged transactions and earn profit. These topics can help you to operate with sufficient information and accurately in the trading market. Do you have any experience with these deals? share it!