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Board Beginners & Help
Re: I'd like to buy 150bTc for 44$ each...
by
realnowhereman
on 16/01/2012, 14:27:15 UTC
A Future contract is an entirely different animal. With a future contract there is no payment upfront either way, it is an outright buy per a date in the future, at a price agreed upon at the outset. Both parties are obliged to fulfill the contract at the end of the agreed upon period.

Hmmm, I'm not a finance guy, so I don't know; but this doesn't sound right.

I thought that futures worked so that you bought something now that the seller doesn't have yet.

The classic example is the farmer.  The farmer can sell (say) wheat at $100 a kilo in September; but to do so he needs to spend money now to buy seeds, labour and tools.  If he doesn't have that money, he will get $0.  A futures buyer offers $90 per kilo right now; giving the farmer the capital he needs to produce the wheat.

i.e. the money changes hands now; the product changes hands in the future.

Have I misunderstood?