| Share market which involves intraday trading involves | | | | market started was having some of the additional |
| a lot of risk. The traders were becoming reluctant | | | | products such as Gold, Silver, crude oil, Natural Gas |
| towards share trading due to the uncertainty at the | | | | and many other agricultural products. |
| time period of delivery. In order to hedge out that | | | | Later on with the development of the market the |
| risk there was a provision of future trading being | | | | products that were added to the list include stock |
| evolved which enabled the share holder to trade in a | | | | future and stock future index. There are two types |
| particular product for a predetermined price after a | | | | of contracts in future trading which are commodity |
| period of time. Future trading is also known as trading | | | | futures and financial future with the development and |
| for future contract. It is totally different from the | | | | ending of the currency gold standards the Chicago |
| intraday trading where the trader has to be | | | | board decided to launch the financial future contract |
| spontaneous for buying and selling whereas in future | | | | in the market for the first time and since then it has |
| contract there is usually a time period of 3 to 6 | | | | become the most traded future item. Later on there |
| months. This is a sort of liberty of giving a thought | | | | was a revolution being brought about in the share |
| to the contract purchased by the trader. | | | | market that was electronic mode of trading which |
| Future trading was started in an organized manner in | | | | was become a more feasible mode of trading for |
| the year 1840 in Chicago, and in the year 1848 the | | | | everyone. |
| first centralized futures trading market came into | | | | There are varieties of products available in the future |
| existence which was named as the Board of Trade | | | | contract including agricultural products, metals, energy |
| for the city of Chicago, this board allowed trading in | | | | products etc. The future contracts have bonds, |
| both spot as well as the future trading. But if we talk | | | | treasury notes and other interest-based assets. |
| about the origin of trading in future contract it was | | | | Stock future index is for hedging out the fluctuations |
| started around 17 or 18 century mainly in Japan and | | | | in the share market whereas the currency future is |
| Holland and it was done specially in the products like | | | | for individual currencies and index future is for a |
| rice and wheat. Previously this market only had | | | | group or for currency of market as a whole. |
| products like rice, wheat, oat etc, but later on the | | | | |