We use cookies to give you the best possible experience. Futures trading is an option for investors with experience in leveraged products and derivatives, and who understand the risks involved.

As futures trading has a high degree of risk, it is not suitable for all investors. Futures are financial contracts traded on an exchange in which a buyer and seller agree to trade assets for a specific price, with an agreed expiry date.

Futures Fundamentals: Characteristics

These contracts detail the quality and quantity of the underlying assets — typically bonds, currencies, equity indices or commodities. At the agreed expiry date, the futures contract can either be cash settled or physically delivered. Futures can be highly leveraged because you can put down a deposit that is a low percentage of the total value of the assets being traded, which can greatly magnify gains or losses.

The deposit — also known as the initial margin — is set for each type of futures contract by the exchange or clearing house. Additional funds may be required to cover any day-to-day losses.

Margin | Interactive Brokers

When your contract expires or position is closed, you will be refunded the initial margin, plus or minus any gains or losses that arise from holding the contract. If the amount in the account drops too low before the contract expires, brokers can make a margin call and request an additional deposit to bring the margin back to the initial amount. Futures trading offers investors the opportunity to access a particular financial asset with a smaller deposit and speculate on the price movements in various markets, or manage the risks of price fluctuations.

What is a futures contract? How to hedge your exposure with futures. The psychology of trading.

Macquarie Equities Limited ABN 41 MEL AFSL This information does not take into account your objectives, financial situation or needs. Before making any financial investment decision or a decision about whether to acquire any product mentioned on this page, a person should obtain and review the terms and conditions relating to that product and also seek independent financial, legal and taxation advice.

Macquarie Equities Limited ABN 41 MEL AFSL is the issuer of the futures and futures option products referred to on this webpage. You could also lose more than the capital you invested. Before deciding to trade in futures, you should, in conjunction with your adviser or broker, give consideration to your objectives, financial situation and needs and form the opinion that dealing in these products is suitable for your purposes.

We recommend that you consider the risks associated with these products and consult your adviser or obtain other independent advice before making a decision to trade in futures.

Before making any financial investment decision or a decision about whether to acquire a credit or lending product, a person should obtain and review the terms and conditions relating to that product and also seek independent financial, legal and taxation advice.

Futures Markets Margin

Except for Macquarie Bank Limited ABN 46 AFSL and Australian Credit Licence MBL , any Macquarie entity referred to on this page is not an authorised deposit-taking institution for the purposes of the Banking Act Cth. That entity's obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that entity, unless noted otherwise.

Welcome to Macquarie To help us tailor your experience, please select an option below. Important note We use cookies to give you the best possible experience.

Personal Expertise Using leverage in futures trading. If you enjoyed reading this article, why not share it? Simply copy and paste the text and include a link to the article. Please read the Expertise Articles Terms of Use before sharing.

Using leverage in futures trading. How futures trading works Futures trading is an option for investors with experience in leveraged products and derivatives, and who understand the risks involved. Investors can start trading through futures brokers or an online trading platform.

Did you mean [[state. No results found, try different keywords. Expertise Articles You might also like. How to hedge your exposure with futures Employee share schemes The psychology of trading. Futures trading Local service, global reach View this product.

Macquarie Prime Combining innovative technology with leverage power View this product. Macquarie Cash Management Account Manage your cash with confidence View this product. Terms of Use Important Information Privacy and Cookies Financial Services Guide Security and Fraud Site map.