Future market is the market where the commodities, securities or foreign currencies are bought and sold. Purchase of goods is done on today's rate
Future market is the market where the commodities, securities or foreign currencies are bought and sold. Purchase of goods is done on today's rate, but going forward, what will be the rate of those items or securities or foreign currencies ... they are left on a future fixed date. This rate goes back and forth every day as a stock market.
Suppose I go to the future market to Rs. Buying a cooler of 3000, thinking that going forward, it will cost Rs. 5000 is going to happen. This happened even further. Cooler prices in the future market on Tuesday will be Rs. Got 5000. My Rs. 2000 survived If we accept that the cooler will cost Rs. 2000 then I would get Rs. There was a loss of 1000. This type of market is called future or forward market.
The largest example of future market in India is National Multi Commodity Exchange of India Ltd. (NMCE).
Contract Month: Future contract is as same as with the options market in which they are valid in a specified period of time. These contracts are delivered and it will be either expired. In Contract which delivery takes place in the month, and also the contract month is also called as the delivery month.
Option on Future: An option on the future contract which gives the holder for investing and the right to enter on the specified future contract. The initial holder of the option which would enter into the contract and buy the assets on the future price where as the investors also enter into the future contract as the short and sell the assets at the specified price in the future date.
In the future market buying and selling it may seem as risky and complicated. It is a global market place to buy and sell commodities for spot or by the future delivery. Future market is the one which buys and sell future contracts as a price per unit, quality, type and quantity of the commodity or mcx tips as when the contracts expire. The two players are hedgers and speculators of the future market in which hedgers gives its efforts in minimizing the risk or to avoid rising and declining prices whereas speculators they try to gain profit from the risk by buying or selling.
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