A futures contract is a value equal to a stock or bond with some similarities and many differences. A share entitles you to own a small part of the business, while a bond makes you a lender to a business or the government.

A futures contract is a legally binding contract between two parties with a set of conditions for the delivery of the underlying asset, such as a commodity or a financial instrument, on a specific date in the near future.

The futures market is the backbone of the wholesale and retail market for commodities ranging from oil, wheat, corn, heating oil, meat, livestock, soybeans, and other food products. So you can imagine the importance of the futures market. The futures market serves as hedging and speculation.

Now, future contracts are subject to design deadlines and expire on a fixed date. These contracts are regulated through a central clearing schedule, so the risk of one of the parties backing out of the contract is minimal. This limits the time and risk exposure experienced by hedgers and speculators.

Most brokerage firms require individuals to deposit a fixed amount of at least $ 5,000 into their brokerage account before they can begin trading futures. Now, almost everywhere in the world, futures trading has moved from open protest to e-commerce.

In the US, open shouting trading still takes place during official hours on different future exchanges. However, most of these futures contracts are also traded electronically. GLOBEX enables the electronic trading of most of these futures contracts 23 hours a day. E-commerce provides a more level playing field, more price transparency, and lower transaction costs.

CME, NYMEX, and CBOT are the top three futures exchanges. GLOBEX allows you to trade most of the contracts that are traded on these exchanges. Popular contracts traded on GLOBEX are E-minis like the S&P 500, NASDAQ 100, and Dow. You can also trade E-mini gold futures as well as crude oil futures on GLOBEX.

GLOBEX night trades tend to be rare and more volatile than during official trading hours which are 8:30 am EST to 4:15 pm EST. If you trade financial news on Bloomberg or CNBC before the stock market officially opens, you’ll find S&P 500 futures quotes and others pulled from GLOBEX.

These GLOBEX quotes are in real time and if you have taken a position with a sell stop or a buy order, early the next morning, you can find your position executed with a new position or completely out of position. Futures can be very profitable if you know how to do it!