# Futures Trading

### **What is a Futures Trading?** 

A Futures Trading is a derivative product and it is a contract between two parties where both parties agree to buy and sell a particular asset of a specific quantity and at a predetermined price, at a specified date in the future. These financial instruments are frequently used by both hedgers and speculators as a way to potentially anticipate future price movements, either for hedging against risks or for making profits. Futures trading is indeed a highway to financial freedom, but it is never a shortcut. What you need is to learn from experience and foster your own trading mechanism. 

The number of units of an asset that shall be bought or sold and the time at which the transaction will happen are specified in the futures contract. The settlement happens when the contract reaches its expiration date. During this time, the trader who holds the futures is required to buy or sell the asset for the agreed price.

Some traders exit their positions before the expiration date of the futures. Here are some of the methods they use:

1. Offsetting – The trader closes a position by making another of equal size and value.
2. Rollover – Traders roll over (extend) their positions before the contract expires.
3. Last is to wait for the contract’s expiration in which both parties are required to buy or sell the underlying asset for an agreed-upon price.

<figure><img src="https://2908180469-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FsxjEg9FzKLG6H92VgoU6%2Fuploads%2FTfp16ALZDqfilazFZ6Qu%2Fimage.png?alt=media&#x26;token=f1ec79e1-2678-41ff-b5e7-c843067e64a9" alt=""><figcaption></figcaption></figure>

{% content-ref url="futures-trading/how-to-use-futures-trading" %}
[how-to-use-futures-trading](https://idax-exchange.gitbook.io/allhelp-center/product/futures-trading/how-to-use-futures-trading)
{% endcontent-ref %}


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://idax-exchange.gitbook.io/allhelp-center/product/futures-trading.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.