GLOSSARY · CONTRACTS & MONEY
What is Futures Contract?
A futures contract is a standardized agreement to buy or sell an asset at a set price on a future date.
Futures trade on regulated exchanges like the CME. Every contract of the same kind is identical — same size, tick, expiration — which is what makes them liquid and easy to trade.
Day traders almost never hold to expiration. They buy and sell contracts intraday to profit from price movement, closing positions before the session ends.
EXAMPLE
Buying one ES contract gives you exposure to the S&P 500 at $50 per index point. If the S&P rises 20 points while you hold it, you make $1,000 before fees.
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