Commodity futures market;
A new tool in the capital market
Earning profit either by increasing the price or by decreasing it
In the future contract, the two parties commit to exchange a certain amount of a commodity with a specified standard at the due date. In other words, all the agreements are in the present tense, but the transaction takes place in the future tense.
Suppose you plan to buy a product in the next 3 months, but currently you do not have enough money to buy that product. On the other hand, you are worried that the price of the item you want will increase in the next 3 months and you will have to buy it at a more expensive price at that time.
On the other hand, imagine that you have a product now and you want to sell it in the next 3 months, but you are worried that the price will drop. What is the solution in such a situation?
A commodity futures contract allows you to buy or sell a commodity now at a specified price and for a specified time in the future, without paying for it at the time of the contract.