They are financial contracts obligating the buyer to purchase an asset or the seller to sell an asset at a predetermined future date and price. Futures trading commonly refers to futures whose underlying assets are securities in the stock market.

These contracts are based on the future value of an individual company's shares or a stock market index like the S&P 500, Dow Jones Industrial Average, or Nasdaq.

Why trade futures?

Trade some of the most liquid contracts, in some of the world's largest markets. Diversify into metals, energies, interest rates, or currencies.

Ease of going short

No short sale restrictions or hard-to-borrow availability concerns.

Capital efficiencies

Control a large amount of notional value with relatively small amount of capital.

Flexibility

Because they’re traded on major exchanges, they’re typically as easy as stocks to buy and sell.