Futures market investing Essay Example | Topics and Well Written Essays - 750 words

Futures market investing - Essay Example ed in the prices of grain to fall and therefore the dealers started selling the contracts as To Arrive contracts, that consisted of the delivery of the grain at a future date on a price specified already on the agreed contract. This got them buyers and reduced their risk and this is how futures market started gaining its roots in the commodities market. The futures market is usually defined as the auction market in which the participants of the market are involved in the transactions of buying and selling the commodities or the future contracts on the terms of the delivery dates in future with the present level agreed prices by both the parties (Valdez 35). Futures market and trading in this area is usually considered to be having a high level of risk involved with it and many speculation aspects are involved in this element. Investing in the futures market are considered as gambling by many investors as the market are unpredictable and anything can be expected for the future. Unpredictable market situations can be both positive and negative for the contractor but usually futures market tends to decrease the level of risk as at times prices are negotiated at an early stage (Sullivan and Sheffrin 76). Along with the element of risk that is involved in the futures market it is also an irony that the futures market can be used a tool for minimizing the level of risk. For this, there needs to be carried out proper planning and research, analysis needs to be made by looking at the facts and figures and the history, and then finally the money then should be managed accordingly. This way of using the future market tool can prove to be highly profitable. When the previous history and future prospects are analysed then it becomes easier for the investor to invest in the futures market for gaining substantial level of returns (Sullivan and Sheffrin 98). There are many reasons present for considering investment in the futures market by individuals and corporations. There