However, futures contracts are marked to market daily. A futures contract has no value when purchased or sold initially. Whatever gain or loss was achieved during the day is added or subtracted to the trader's account at the end of each trading day. A stock market investor could buy a stock and forget about it, but a futures trader cannot do that. Even if a futures trader is right about the long-term trend in the price, the trader's account could be wiped out by a sharp intraday change in price.
Traders enter contracts to buy or sell the underlying asset.
Leverage and Margins Futures trading is highly leveraged. These margins are not a down payment on the contract. The margins are good faith deposits against an adverse change in price. The loss on a futures contract can be much greater than the margin. If the loss is greater than the funds in the trader's account, the trader must put in more money.