1. The function of futures markets is price discovery, price risk hedging, and market efficiency improving.
2. Futures markets provide a current consensus of knowledgeable opinions about the future price of commodities or financial instruments.
3. Futures contracts are a promise between two parties to exchange a commodity at a specified time and place in the future for a stated price.
4. Most market participants prefer to offset futures positions, rather than to make actual delivery.
5. Parties who have sold a futures contract are said to have taken a short position.
6. Futures trading takes place only on government-regulated exchanges.
7. If you go short and the futures price goes up, you lose money.
8. Futures is one of the types of financial futures.
9. The futures price is not constant until the contract expires.
10. A long position involves inflows greater than outflows in a currency and a short position involved outflows greater than inflows.
11. Hedging in futures markets is synonymous with shifting risk.
12. Margin requirements ensure the performance of both parties to a futures contract.
13. Margin requirements also provide traders with substantial leverage.
14. At the close of every trading day, the clearinghouse matches buy and sell contracts for the day.
15. The clearinghouse informs every exchange member of their net settlement status.