Learning Hub
Futures Basics
Definition
A futures contract obliges BOTH sides to transact at a set price on a set date — leveraged exposure, symmetric risk.
Psychology
Futures move almost 1:1 with the underlying, and margin makes gains AND losses bigger. There's no premium — but no capped risk either.
Real-life analogy
💡 A futures contract is a pre-order with a deposit: both you and the shop are locked in, whatever the price does later.
Key takeaways
- Both sides are obliged — unlike options.
- Daily mark-to-market: losses hit your account every day.
- Leverage cuts both ways; size small.
Memory tip
🧠 Futures = a see-saw with no seatbelt — balance (margin) is everything.
Quick quiz — did you understand?
1. Which best describes Futures Basics?
2. Memory tip for Futures Basics:
Educational and probability-based analysis only. This is not financial advice and not a prediction of real market outcomes.