What are futures?

A futures contract is a standardized agreement tied to the future price of an underlying market. Active traders usually close the position before expiration; they are trading the change in the contract price rather than taking delivery.

Futures trade on regulated exchanges. Every contract specifies its market, minimum price movement, dollar value, and expiration cycle. That standardization helps create transparent pricing and liquidity.

Leverage is the part beginners must respect. You control exposure larger than the cash required to open the trade, so a small price move can create a meaningful gain or loss. Before placing any order, know the contract, point value, stop distance, and maximum acceptable loss.

Your first goal is not prediction. It is understanding the instrument well enough to control the downside.