You sell a contract because you think the price will go down [5]. 2. Leverage: The Double-Edged Sword
This is the biggest difference from stocks. You don't have to pay the full value of the contract upfront. You only put down a small deposit called (usually 3–10% of the total value) [1, 2]. buying futures for dummies
When you buy a futures contract, you aren't getting the physical item delivered to your house today. You are agreeing to a price for a transaction that happens later [2, 5]. You sell a contract because you think the