==== ==== For more information try this: http://hotshorturl.com/aik57 ==== ====
Share market which involves intraday trading involves a lot of risk. The traders were becoming reluctant towards share trading due to the uncertainty at the time period of delivery. In order to hedge out that risk there was a provision of future trading being evolved which enabled the share holder to trade in a particular product for a predetermined price after a period of time. Future trading is also known as trading for future contract. It is totally different from the intraday trading where the trader has to be spontaneous for buying and selling whereas in future contract there is usually a time period of 3 to 6 months. This is a sort of liberty of giving a thought to the contract purchased by the trader. Future trading was started in an organized manner in the year 1840 in Chicago, and in the year 1848 the first centralized futures trading market came into existence which was named as the Board of Trade for the city of Chicago, this board allowed trading in both spot as well as the future trading. But if we talk about the origin of trading in future contract it was started around 17 or 18 century mainly in Japan and Holland and it was done specially in the products like rice and wheat. Previously this market only had products like rice, wheat, oat etc, but later on the market started was having some of the additional products such as Gold, Silver, crude oil, Natural Gas and many other agricultural products. Later on with the development of the market the products that were added to the list include stock future and stock future index. There are two types of contracts in future trading which are commodity futures and financial future with the development and ending of the currency gold standards the Chicago board decided to launch the financial future contract in the market for the first time and since then it has become the most traded future item. Later on there was a revolution being brought about in the share market that was electronic mode of trading which was become a more feasible mode of trading for everyone. There are varieties of products available in the future contract including agricultural products, metals, energy products etc. The future contracts have bonds, treasury notes and other interestbased assets. Stock future index is for hedging out the fluctuations in the share market whereas the currency future is for individual currencies and index future is for a group or for currency of market as a whole.
Simran Bhatt MBA(E-commerce) Interested in http://www.capitalheight.com
Article Source: http://EzineArticles.com/?expert=Simran_Bhatt
==== ==== For more information try this: http://hotshorturl.com/aik57 ==== ====