Commodity Futures: CNBC Explains

Commodity Futures: CNBC Explains

Unlike forward contracts, commodity futures can be bought and sold on the open market. How do commodity futures differ from forward contracts and what are the risks associated with them? Salman Khan of the Khan Academy explains the mechanics of futures contracts.

Unlike forward contracts, commodity futures can be bought and sold on the open market. How do commodity futures differ from forward contracts and what are the risks associated with them? Salman Khan of the Khan Academy explains the mechanics of futures contracts in the video below.

From this video, you’ll understand:

• Counter-party risk
• The reasons for commodity futures trading
• The relationship between futures and forward contracts