Commodity Future - ayaohsu/Personal-Resources GitHub Wiki

A "Future" Contract

It's an agreement between two parties to exchange a specified quantity of a certain underlying asset at a particular time in the future at a specified price.

Long Position: Market participant is the "buyer" of the contract. You take this position if you believe the price will go up over time.

Short Position: Market participant is the "seller" of the contract. You take this position if you believe the price will go down over time.

Oil catastrophe

• People want to store oil and sell it later, presumably at a higher price.
• But running out of places to store.