IFC Markets
Questrade - Empowering you to take control of your financial future. Join the journey!

What are the main types of Futures contracts (e.g., commodities, financials, currencies)?

​​​​​​Futures contracts come in several types, categorized based on the underlying asset. Here are the main types of futures contracts:

1. Commodity Futures

Contracts based on physical goods like agriculture, metals, and energy.

Examples:
  • Agricultural: Corn, Wheat, Soybeans, Coffee, Cotton
  • Metals: Gold, Silver, Platinum, Copper
  • Energy: Crude Oil, Natural Gas, Heating Oil
Use Cases:
  • Hedging price risks (e.g., farmers securing future crop prices).
  • Speculation by traders betting on commodity price movements.

2. Financial Futures

Contracts based on financial instruments like stock indices, bonds, and interest rates.

Examples:
  • Stock Index Futures: S&P 500, Nasdaq-100, Dow Jones, Nikkei 225
  • Bond Futures: U.S. Treasury Bonds, German Bunds
  • Interest Rate Futures: LIBOR, Eurodollar, Federal Funds Rate
Use Cases:
  • Hedging against interest rate or market fluctuations.
  • Institutional investors managing portfolio risk.

3. Currency Futures (Forex Futures)

Contracts to buy or sell a specific currency at a future date.

Examples:
  • EUR/USD (Euro vs. U.S. Dollar)
  • GBP/USD (British Pound vs. U.S. Dollar)
  • USD/JPY (U.S. Dollar vs. Japanese Yen)
Use Cases:
  • Companies hedging against foreign exchange risks.
  • Traders speculating on currency movements.

4. Cryptocurrency Futures

Contracts based on digital assets like Bitcoin and Ethereum.

Examples:
  • Bitcoin Futures (BTC/USD) – Traded on CME, Binance, Bybit
  • Ethereum Futures (ETH/USD)
Use Cases:
  • Hedging crypto price volatility.
  • Trading with leverage in crypto markets.

5. Interest Rate Futures

Contracts based on short-term or long-term interest rates.

Examples:
  • U.S. Treasury Bond Futures (10-year, 30-year)
  • Federal Funds Rate Futures
Use Cases:
  • Banks and financial institutions hedge against interest rate changes.

6. Volatility Futures

Contracts based on market volatility indices like the VIX (CBOE Volatility Index).

Examples:
  • VIX Futures – Used to hedge or speculate on market uncertainty.
Use Cases:
  • Traders betting on stock market volatility.
Forexmart
InstaForex