What Are Futures? A Complete Beginner's Guide
From what a futures contract is to the major products (gold, Nasdaq, crude, indices), trading hours, margin, and risk — the essentials every beginner needs, in one place.
In short — A futures contract lets you trade a large position with a small margin deposit, in both directions (long and short). That means bigger opportunity and bigger risk. Before you start, make sure you understand four things: trading hours, margin, tick value, and risk.
What is a futures contract
A future is a standardized contract to buy or sell an asset at a set price on a future date. When these contracts are listed and traded on global exchanges such as the CME (Chicago) or HKEX (Hong Kong), retail traders often trade them through platforms like MetaTrader.
Unlike stocks, futures are two-directional by nature. If you expect price to rise, you go long (buy); if you expect it to fall, you go short (sell) — so you can seek opportunities even in falling markets. Futures are also margined (leveraged): you post only a fraction of the contract’s notional value to control the whole position.
Common products — gold, Nasdaq, crude, indices
The futures products retail traders watch most often include:
| Product | Underlying | Exchange | Character |
|---|---|---|---|
| Gold | International gold price | COMEX (CME) | Safe-haven; sensitive to USD & rates |
| Nasdaq (NQ) | Nasdaq-100 index | CME | Tech-heavy; high volatility |
| Crude (WTI) | West Texas Intermediate oil | NYMEX (CME) | Sensitive to supply & geopolitics |
| Hang Seng (HSI) | Hong Kong Hang Seng index | HKEX | Sensitive to China policy & cycle |
Trading hours, profit/loss per tick (tick value), and margin all differ by product. Even “one contract” carries very different risk depending on the product, so always check the contract spec before you enter.
Trading hours — nearly 24 hours, but product-specific
CME products (gold, Nasdaq, crude) trade from Sunday evening through Friday nearly 24 hours a day, with a short daily settlement break. Index products on other exchanges (like the Hang Seng) follow a different schedule. Note that daylight saving time shifts the local-time boundaries by an hour.
Margin and leverage — opportunity and risk
With futures you post margin, not the full contract value. That lets you hold a large position with a small amount — but it also amplifies losses. If unrealized losses pull your margin below the maintenance requirement, you can face a margin call or forced liquidation.
Risks to understand before you start
- Leverage risk — small price moves become large gains or losses relative to your margin. Losses can exceed your deposit.
- Volatility & gaps — prices can jump sharply (gap) around major data releases or session opens.
- Psychology — a two-directional, 24-hour market invites overtrading. Without a stop-loss rule, that is dangerous.
It is safest to start from the premise that most participants lose money in this market. Practice thoroughly with small size or a demo, and set your own stop-loss rules first.
Put the four essentials on one screen
Hours, margin, tick value and risk — the four things this guide opens with all sit on a single screen. Merini’s free web demo runs in the browser on live prices with $10,000 of virtual money, so you can open one position and watch the margin it consumes, the P&L stepping with each price increment, and how much cushion is left before a liquidation would take the trade away from you. Two things to be clear on: the instruments here are CFD-style products referencing these markets rather than exchange-cleared contracts, and no order you place reaches a broker → See the four on one screen
Frequently asked questions
Can I start with a small amount?
Standard contracts carry sizable margin, but micro futures (e.g., Micro Nasdaq) have a smaller contract size and a lower barrier to entry. Note that a smaller size does not change the underlying risk of leverage.
How are futures different from stocks?
Stocks are typically bought and held with no expiry. Futures are two-directional, have an expiry, and are margined — leverage is built in, so volatility is higher.
Do they trade overnight?
Yes. CME products trade through overnight sessions in local time, which is why they are sometimes called “night futures.” Check the specific schedule for each product before trading.
Related reading → What moves gold · What moves Nasdaq futures · What moves crude oil · What moves the Hang Seng · Futures margin explained · Leverage and risk · Futures trading hours · How to get started · Futures vs. stocks
This content is for information and education only and is not investment advice or solicitation. Trading conditions (hours, margin, fees, tick value, etc.) vary by exchange, broker, time, and daylight saving — always verify with your own broker before trading. Derivatives trading can result in losses exceeding your deposit.