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Q: What is futures trading?

Article author
Injective Protocol
  • Updated

In a futures market, prices on the exchange are not "settled" instantly, unlike in a traditional spot market. Instead, two counter-parties will make a trade on the contract, with settlement on a future date when the position is liquidated.

Note: Due to how the futures market calculates unrealized profit and loss, a futures market does not allow traders to directly buy or sell the commodity; instead, they are buying a contractual representation of the commodity, which will be settled in the future.

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