FUTURE MARKET Meaning and
Definition
-
Future market refers to a financial market where contracts for the sale and purchase of commodities, currencies, stocks, or other financial instruments are traded for future delivery at pre-determined prices and dates. It is a type of derivative market where participants enter into agreements, known as futures contracts, to buy or sell a certain asset at a specified price and date in the future.
These contracts function as a standardized tool to provide financial security against price fluctuations and to enable hedging strategies for market participants. Future markets serve as a platform for investors, traders, and speculators to manage risk, speculate on future price movements, and engage in arbitrage opportunities.
In the futures market, buyers agree to take delivery of the underlying asset or settle the contract in cash, while sellers commit to supply the asset or provide cash settlement by the contract's expiration date. The prices of futures contracts are determined through the interaction of supply and demand forces within the marketplace, and they are subject to continuous price changes as market conditions evolve.
Future markets are regulated and operated by exchanges, such as the Chicago Mercantile Exchange (CME) and the New York Mercantile Exchange (NYMEX), which facilitate trading, establish contract specifications, and ensure fair and orderly market conditions. Due to the leverage involved in futures trading, it can be a high-risk activity, requiring careful consideration and knowledge of market dynamics.
Common Misspellings for FUTURE MARKET
- duture market
- cuture market
- vuture market
- guture market
- tuture market
- ruture market
- fyture market
- fhture market
- fjture market
- fiture market
- f8ture market
- f7ture market
- furure market
- fufure market
- fugure market
- fuyure market
- fu6ure market
- fu5ure market
- futyre market
- futhre market
Etymology of FUTURE MARKET
The term "future market" is derived from the combination of two words: "future" and "market".
- Future: The word "future" comes from the Latin word "futurus", which means "about to be" or "yet to come". It is related to the Latin verb "esse", meaning "to be". In English, "future" refers to the period of time that comes after the present, encompassing events and circumstances that have not yet occurred.
- Market: The term "market" is derived from the Latin word "mercatus", meaning "trade" or "buying and selling". It is related to the Latin verb "mercare", which signifies "to trade" or "to buy". In English, a market can refer to a physical location where goods or services are bought and sold or to the overall economic system in which transactions occur.
