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<p style="color: #666; font-size: 14px; line-height: 1.8; margin: 15px 0;">Futures, in simple terms, are agreements to buy or sell stocks at a specific price on a future date. They are like contracts that allow traders to speculate on the price movement of an asset without actually owning it.</p>

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<h3 style="color: #333; font-size: 16px; margin: 10px 0; font-weight: bold;">Here's an example how futures work in stock market:</h3>
<p style="color: #666; font-size: 14px; line-height: 1.8; margin: 10px 0;">Let's say you believe the price of a particular stock will go up in the future. You can enter into a futures contract to buy that stock at a predetermined price on a specific date. If the stock price does increase, you can sell the futures contract before the expiration date and make a profit. However, if the stock price goes down, you may face losses.</p>
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<h3 style="color: #333; font-size: 16px; margin: 10px 0; font-weight: bold;">Features of Futures trading:</h3>

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<p style="color: #666; font-size: 14px; margin: 8px 0;"><strong style="color: #6f42c1;">1. Contractual Agreement:</strong> Futures contracts are binding agreements between two parties to buy or sell an underlying asset at a predetermined price on a specific future date.</p>
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<p style="color: #666; font-size: 14px; margin: 8px 0;"><strong style="color: #007bff;">2. Standardized Terms:</strong> Futures contracts have standardized terms and specifications, including the quantity, quality, and delivery date of the underlying asset. This promotes transparency and liquidity in the market.</p>
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<p style="color: #666; font-size: 14px; margin: 8px 0;"><strong style="color: #28a745;">3. Leverage:</strong> Futures trading involves trading on margin, which means that traders can control a larger position with a smaller initial investment. This amplifies both potential profits and losses.</p>
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<p style="color: #666; font-size: 14px; margin: 8px 0;"><strong style="color: #dc3545;">4. Price Discovery:</strong> Futures markets provide a platform for price discovery, as the buying and selling activities of traders determine the market price of the underlying asset. This price discovery mechanism facilitates efficient trading and hedging.</p>
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<p style="color: #666; font-size: 14px; margin: 8px 0;"><strong style="color: #ff9800;">5. Risk Management:</strong> Futures contracts allow traders to hedge against potential price fluctuations in the underlying asset. Hedgers use futures to protect against adverse price movements, while speculators aim to profit from price changes.</p>
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<p style="color: #666; font-size: 14px; margin: 8px 0;"><strong style="color: #0099ff;">6. Liquidity:</strong> Futures markets tend to be highly liquid, meaning there is a large number of buyers and sellers. This facilitates easy entry and exit from trades and minimizes the impact of large orders on market prices.</p>
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<p style="color: #666; font-size: 14px; margin: 8px 0;"><strong style="color: #333;">7. Variety of Assets:</strong> Futures contracts are available for various asset classes, including commodities, currencies, stock indices, and interest rates. This allows traders to diversify their portfolios and participate in different markets.</p>
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<p style="color: #666; font-size: 14px; margin: 8px 0;"><strong style="color: #007bff;">8. Exchange-Traded:</strong> Futures contracts are typically traded on regulated exchanges, ensuring transparency, standardized procedures, and counterparty risk mitigation.</p>
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<p style="color: #666; font-size: 14px; margin: 8px 0;"><strong style="color: #28a745;">9. Mark-to-Market:</strong> Futures positions are marked to market daily, which means that gains or losses are settled daily based on the closing prices. This helps maintain account balances and reduces the risk of default.</p>
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<p style="color: #666; font-size: 14px; margin: 8px 0;"><strong style="color: #ff9800;">10. Trading Hours:</strong> Futures markets generally have extended trading hours, allowing traders to access the market beyond regular trading hours.</p>
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<p style="color: #666; font-size: 14px; line-height: 1.8; margin: 0;">Futures trading is popular because it provides opportunities for potential gains even if the market is going down. It allows traders to speculate on price movements, hedge against risks, and take advantage of market fluctuations. However, it's important to understand that trading futures involves risks, and it requires knowledge and careful consideration. Before getting involved in futures trading, it's recommended to learn more about how they work and consider seeking guidance from professionals or experts and <strong>practice on a virtual trading platform - SmartBulls.</strong></p>
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