ADVFN Logo ADVFN

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for tools Level up your trading with our powerful tools and real-time insights all in one place.

What is an Underlying Asset in the futures market?

In the futures market, the underlying asset is the actual commodity or financial instrument that the futures contract represents. It is the asset or commodity that the buyer and seller agree to exchange at a specific price and date in the future.

For example, if a futures contract is for crude oil, then crude oil is the underlying asset. Similarly, if a futures contract is for gold, then gold is the underlying asset.

The underlying asset is important because it determines the contract’s value and the terms of the contract. The price of the futures contract is based on the price of the underlying asset, and the contract specifies the quality and quantity of the asset to be delivered.

The quality and quantity of the underlying asset are standardized in futures contracts to ensure uniformity and liquidity in the market. This allows buyers and sellers to easily trade contracts without having to negotiate individual terms for each transaction.

Disclosure: Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees

Advertisement

In addition to commodities, futures contracts can also be based on financial instruments such as stock indexes, interest rates, and currencies. In these cases, the underlying asset is the financial instrument itself, and the futures contract allows investors to speculate on the price movements of these instruments.

Find a Spread Betting Broker

  • We're regulated in 7 jurisdictions including with the FCA in the UK
  • Access razor sharp spreads from 0.0 pips* and top tier liquidity
  • 99.99% fill rate*, fast execution and no dealing desk intervention
  • Choose from 4 world-leading platforms, including MT4/5 & TradingView

75.3% of retail investor accounts lose money when trading spread bets and CFDs with this provider.

Min Deposit:No Minimum Deposit
Mobile App: Yes
  • Over 4,700 instruments to trade
  • Social features, including copy trading
  • Smart Portfolios (ready-made thematic portfolios)
  • Free $100,000 demo account

76% of retail investor accounts lose money when trading CFDs with this provider.

Min Deposit:$100
Mobile App: Yes
  • Access over 17,000 markets to trade
  • Trade quickly and smoothly, with technology designed to ensure that your deal goes through
  • Free trading courses and webinars
  • Round-the-clock support 24 hours a day, from 8am Saturday to 10pm Friday

68% of retail investor accounts lose money when trading CFDs with this provider.

Min Deposit:£250 by credit/debit card and PayPal
Mobile App: Yes
Futures
What is an Underlying Asset in the futures market?
Categories: