What Heck is a Futures Contract?

Lots of people talk about futures, but what are they really? Why do you care? Because trading futures, if you use right system, can be your path to great wealth.

To understand what we mean by a futures contract, let’s meet trader Bob (a buyer), who wants to purchase a widget today because he believes that widget will have more value in future. If all goes well, Bob will buy widget now, wait for price to go up, then sell widget for a small profit in a month. But where can Trader Bob obtain widget? It so happens that Trader Sam (a seller) has in his possession widget that Trader Bob wants. Trader Sam would like to sell widget today because, unlike Trader Bob, he believes that widget will have less value in future than it does today. Trader Sam is selling today because he believes that he will make more money now than if he waits to sell in a month.

So Trader Bob and Trader Sam get together and agree upon a price for widget. Trader Bob is now proud owner. If value of widget indeed increases in future, then Trader Bob can become a seller and part with widget with a profit. If value of item decreases in future then Trader Bob will have to sell widget for a loss.

This basic relationship between buyer and seller is foundation for all commerce. Futures are simply a variation on this theme, where instead of buying a widget now, Trader Bob contracts to buy widget in a few months at a fixed price. The transaction still relies on buyer believing price will go up, and seller believing price will go down.

Trading Critters

Futures traders fall into two categories: hedgers and speculators. The primary economic purpose of futures market is for hedging, which is buying or selling futures contracts to offsets risks of changing prices in cash markets. Hedge traders, such as large commercial firms that may actually take delivery of certain commodities, like coffee or wheat, use futures contracts to protect (hedge) themselves against changing cash prices.

One of most ambitious parts of this plan is to bring more technology to Mortgage Industry and reduce their paperwork by over 17%. Less reliance on paper, equals more automated evaluations and quicker loan approvals. This means customers who look for lenders and apply online are definitely at forefront of Mortgage industry.

The Basic Tenets of Mortgage Consumer Bill of Rights

All Americans Have A Right to Access to Mortgage Credit Fannie Mae hopes to decrease gap in home ownership between whites and blacks, low income earners and middle class families, and other underserved populations. There are more procedures and practices in place to prevent predatory lending, fraud and discrimination. You can be assured that you can find a lender that will approve and finance your loan even if you are not extremely wealthy or you don’t have perfect credit.