What are stock market futures?

What are stock market futures?

Definition: Stock Futures

A futures contract is an agreement to buy or sell an asset on a future date and at a specific price.

Origin

Futures date as far back as human history. Futures trading can be linked back to 1750 BC in Ancient Mesopotamia. Hammurabi, a Babylonian King, wrote a legal code named after himself called the Code of Hammurabi.

Hammurabi’s code allowed the sale of goods and assets to be delivered for an agreed upon price on a future date. This ancient definition of a futures contracts confirms that people have been getting burned by them since the dawn of history. Others have also been able to amass great wealth through trading futures.

In the modern context futures trading is watched by investors late into the night and early into the morning to speculate on the direction stocks will trend before the market open of the following day. It is a hot topic in the early morning hours of online forums. Stock futures can be checked on most trading apps and investing websites.

Futures can be discussed as being red or green. They are also sometimes abbreviated as “futes” in online discussion boards. It becomes more complicated and confusing when they are described as being “Blood Green” or “Hulk Red”.

Overall futures can indicate how the market will trend on the next day at open. However they have also been known to be an unreliable indicator. Consider the following sailor’s song.

Ancient Mariner’s Song

Red futures at night?
Bulls delight
Red futures in morning?
Bears take warning

Examples

“Futures are blood green, Bears beware”

“Futures are blood red, Bears beware”

“How do you look up futures?”

An image with the word hashtag future
Futures have been around throughout the past.

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