Investopedia Video: How Do Futures Contracts Work?

[damable442]

I Love these informative videos. IT MAKES LEARNING FUN!!!!!LOL

[SalahBroadcasting]

Why there are just 15 videos uploaded by investopedia?

[OilTradingAcademy]

Hey guys, did you know that the Futures Market is 100% controlled by a computer? You don't believe me? Just come and check my profile then watch my videos, you'll see what i mean.

[stalker1204]

absoluteky clear explenation

[bassvibrateyaface]

@orginunknown Agreed, the only reason I can see to "bet on red and black" is if you're expecting stable prices and intend to just make money off contract origination and fees... a rather exposed stance depending on the nature of the asset. In practice you would most likely have two separate investors (speculators) with differing expectations of future pricing volatility as you mentioned.

[orginunknown]

btw in the investor in this scenario would make a whopping ZERO dollars. any profit made from the milk price increase would be paid to the ice cream shop. any profit made from the price decrease would be paid to the milk producer. this is like betting on red and black at the same time. 2 investors would make this example make more sense. one has a contract if the price goes up, the other if the price goes down.

[trifio5242]

@orginunknown exactly what i wanted to ask=)) so in real life the are two guys betting either the milk will go up or down right?

[orginunknown]

thank you for a simple explanation with visual examples and without jargon filled verbiage.

[ptevans01]

I don't get it. How do they transfer the volatility to the investor. Yes, i feel slow.

[kkbose]

What a fraud!

[SupriseSexify]

Wait, but how is the investor making any money on that? If the investor is stuck in the middle like that, it seems that whatever money he makes on one side of the operation goes to prop up the other. What I mean is, doesn't whatever money the investor makes from Tim's Dairy go right over to helping Al's Ice Cream, thus no real money is made and vice versa?

[Gumden]

@SupriseSexify

The example given is an 'investor' as a concept. Not the same person. You wouldn't invest two futures contract on the diary and the ice cream. Just either one you think is more profitable. Hope that made sense.

[SupriseSexify]

@Gumden Got it, thank you. Makes infinitely more sense now.

[Melki]

You could hedge directly to the other side. If I were the investor I would ask for hedging fees.

[PlayClaner]

@Melki you cant just "ask" companies. Futures market is like stock market. You cant call the companies you buy stocks in and demand something.

You don't write a normal contract the way it shows in this video.

[SupriseSexify]

Wait, but how is the investor making any money on that? If the investor is stuck in the middle like that, it seems that whatever money he makes on one side of the operation goes to prop up the other. What I mean is, doesn't whatever money the investor makes from Tim's Dairy go right over to helping Al's Ice Cream, thus no real money is made and vice versa?

[yorch512]

I want ICE CREAM !!!!! Funny and very easy to understand.

[ahmedbahghatB]

thanx a million .. very easy and efficient ..

[oceanzoulou]

wow what a simple and very effective explanation.. Thank you very much Investopedia!!!!

[yangtianbao]

Please upload more