Futures trading is the buying or selling a contract that states a future transaction will occur between two parties. The contract price is set at the time of purchase. But the actual transaction (or delivery) of the underlying asset occurs later.

 Investors often use futures contracts to hedge against price movements in the underlying asset. For example, if you are bullish on gold, you might buy a gold futures contract to lock in a price for future delivery. Rather than buying gold…

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