Futures provide access to diverse and uncorrelated markets including major market stock indexes, bonds and foreign currencies, as well as commodities like gold, crude oil, coffee, and more. This diversification allows futures traders to take advantage of many more unique trading situations and opportunities. View more benefits of futures trading.

Futures are also called derivatives, because a Futures contract derives its base value from the cash market for that product. In this article will look at the process of Futures trading which includes understanding Futures symbology, contract specifications, and Futures trading logistics.

There are many benefits unique to futures trading when compared to other asset classes. For many active traders, adding futures to their portfolio is a logical step. Hedging is a risk management strategy commonly used in futures trading which involves taking an offsetting position in the futures market to potentially lock in profit or mitigate the risk of loss and price movement in a stock portfolio or other underlying asset.

Futures contract specifications are the terms and conditions set by the exchange. These specifications outline important details related to trading a specific futures market, including items like the underlying asset, contract size, tick size, expiration date, delivery method, and any other specifications. For the CME Group, you can find contract specifications for the contracts available here.

A tick is the minimum price increment a futures price can change. Each futures market will have its own unique tick value. For example, the E-mini S&P 500 futures have a tick value of .25, and Gold Futures have a tick value of .10.

Notional value is the total dollar value of one futures contract, it is calculated by multiplying the contract size by the current price. For example, if Gold futures are trading at $2,000 an ounce, the notional value for a Gold futures contract is calculated by taking the contract size of 100 ounces multiplied by the $2,000 current price, which equals a notional value of $200,000, (100 X 2000 = 200,000). Each futures market will have its own unique contract size.

The futures markets provide direct access trading to a variety of diverse products that can affect our lives every day. The most active futures markets include Major Market Stock Indexes, US Bonds, Crude Oil and other energy products, Gold and other precious metals, Foreign Currencies, Crypto, and a wide range of Agricultural products, like Coffee, Corn, Cotton, Live Cattle, and any others.

All NinjaTrader futures symbols are comprised of three elements: The symbol root, the contract expiration month, and the contract expiration year. The symbol root is one or more characters that identify the exact futures market to trade, then a three letter abbreviation for the expiration month, and finally the two number expiration year. For example, MES DEC23 (E-Mini S&P 500), CL NOV23 (Crude Oil) , and GC APR24 (Gold).