Last Updated on 21 September, 2020 by Therobusttrader
In this article, we will list some of the most traded futures contracts in Europe. But let’s begin with some basics about futures and futures markets.
What are Futures Markets?
Futures markets are markets where futures contracts are bought and sold. A futures contracts is an arrangement to buy or sell an asset at a certain point in the future at an agreed upon price.
Nowadays most futures contracts that trade in exchanges are standardized agreements. These contracts are typically used by investors and speculators in their portfolio among other securities. The buyer is bound to buy and the seller agrees to sell the underlying asset of the futures contract at a pre-determined price, irrespective of the current market price at that time. The underlying asset may be a financial instrument or a tangible asset.
How Do Futures work?
Futures allow the holder to harness the wild price swings in the market. Usually, stocks, bonds, precious metals, grains, oil, and other power resources are the underlying assets of futures contracts.
The futures market is typically classified into two kinds of participants i.e. the hedgers and the speculators. The hedgers are the ones who are looking to stabilize their incomes and business operations and not necessarily looking to make profits. On the other hand, the speculators are there to make money out of future contracts and are usually not interested to gain ownership of the underlying asset.
Top Futures Contracts to Trade in Europe
Trading liquidity is an important aspect of futures trading. Trading itself is hard enough and you do not need to make it anymore harder by trading illiquid markets. Below is a list of some of the most traded futures contracts in Europe: