The Global future Market is a centralized place where buyers and sellers from around the world meet and get involved in trade contracts.
The pricing can be according to the system or offers and bids can be matched electronically. The contract have dates showing when the price will be paid and when the future will be delivered. A characteristic of this market is that the contract ends without the actual delivery of the commodity. Therefore it involves two parties, the short position who delivers the commodity and the long position who will receive the commodity.
In the Global Futures contract, everything is specified: price per unit, quality, quantity, date of delivery and the method to be used to deliver.The price of the financial instrument is agreed and it is delivered in the future.
The profit and loss of future contract are calculated on daily basis. The price is therefore adjusted according to market price changes. Unlike the Stock Market, the profit and loss in Global Futures is credited or deducted to or from a person’s account each day. In stock market, the loss or gain is not realized until the investor sells their position. Once the contract expires, the price merge into one price. Once both parties in future contract close, the calculation is settled.