How does the commodities (futures) market works?

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How does the commodities (futures) market works?

In: Economics

Anonymous 0 Comments

A future is just a contract. One party agrees to sell a certain amount of a certain commodity at a certain price on a certain date. The other party agrees to buy under those same terms. It gets a lot more complicated when you start discussing derivatives, leverage, etc., but at its heart, that is all they’re doing.