Definition. A standardised exchange-traded contract whose value depends on an underlying, such as an index, and which has a set expiration date.
How it works
The exchange sets the contract size, the minimum price increment and the expiration dates. Index futures are cash-settled. You can take positions on both rises and falls.
Example
MYM is a Dow Jones index futures contract listed on the CME, in which one index point is worth $0.50.
What to watch out for
Futures are leveraged, high-risk instruments. Before you start trading, learn the contract specifications and your broker's rules.
You'll find the full explanation with graphics, examples and exercises in the 🖥️ Order flow atlas space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).
