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Which Futures Positions can you Enter into?

In principle there are only two opposing futures contract positions.

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Do you know the old trader`s slogan? "Wether short or long, the money`s gone?"

The purchase of futures contracts results in what is called a "long position" (future long, long future). The trader expects rising futures contract prices.He basically has the obligation to accept delivery and to pay. He basically has the obligation to accept delivery and to pay.

The sale of futures contracts results in what is called a "short position" (future short, short future). The trader expects falling futures contract prices. He basically has the obligation to deliver the underlying product at the expiry date of the future.

Spread positions are the combination of bought and sold futures contracts with different maturities, or futures contracts on different (yet similar) underlying instruments.

Spread = Combination of long and short positions

In the case of spread trades the trader expects the bought and sold contracts to fluctuate to varying degrees. The trader relies on relative price changes between the used futures contracts.

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