Futures are agreements to buy or sell an asset now for future delivery. Futures, unlike options, require you to accept or tender delivery. Or you can use them to speculate on prices. Commodity producers buy and sell futures to hedge their exposure to changing prices. Speculators who shout themselves hoarse in New York and Chicago pits use them to make an old-fashioned killing.
Most individual investors have no business buying individual contracts.
If you really want to play this game, find an advisor you can trust or a managed futures program. These are essentially mutual funds for futures, with experienced managers and institutional clout. And many brokers sell principal protection programs which invest a majority of your investments in low-risk Treasuries to guarantee return of your original investment, then use the rest for speculation. If you d like to track markets more closely than you can with traditional index funds, but with less leverage than futures, consider Exchange-Traded Funds . Each month, we'll deliver proven tax planning strategies for investors, entrepreneurs, and families.