Futures & Derivatives

About this track

Contracts, margin, contango and hedging — the trader's toolkit.

A ground-up guide to exchange-listed futures — how contracts are specified, how margin actually works, why term-structure matters, and how hedgers and speculators interact on the CME.

What you will be able to do

• Explain what a futures contract standardises and who the natural counterparties in a market are.
• Calculate the notional value behind a contract and the margin actually required to hold it.
• Read a term structure and say whether a market is in contango or backwardation, and what that implies for anyone holding a rolling position.
• Describe how a producer or consumer uses futures to hedge a real-world exposure.
• Choose an appropriately small contract size when learning, rather than a full-size contract.

Before you start

Some familiarity with charts and with the idea of buying and selling an asset. The margin lesson involves multiplication and percentages, nothing more. Working through the Trading Psychology track first is recommended, because leverage punishes emotional decisions faster than any other instrument on the site.

How the lessons build

The sequence deliberately delays the exciting part. You first learn what the contract is and why it exists, then how margin and leverage work — the mechanism responsible for most account losses in this asset class. Term structure follows, because contango and backwardation explain returns that otherwise look inexplicable to anyone holding a rolling position. Hedging comes next to restore the original purpose of these markets, and the track closes on micro contracts, which are the only sensible size for someone learning.

Who this track is not for

This track does not teach day-trading systems, scalping methods or any approach that relies on high leverage to produce results. It does not cover crypto perpetual contracts, which have different funding mechanics. If your interest is in maximising position size on a small account, the honest answer from this material is that the approach has a poor survival rate.

Lessons in this track

• What Is a Futures Contract? (8 min) — A futures contract is a standardised, exchange-traded agreement to buy or sell a fixed quantity of an asset at a set price on a set future date.
• Margin & Leverage in Futures (8 min) — Futures margin is a performance bond, not a loan — and it's why one bad trade can wipe out an account overnight.
• Contango & Backwardation — Term Structure Explained (9 min) — The shape of the futures curve tells you what commercial hedgers actually expect — the single most important concept for commodity traders.
• Hedging with Futures — The Original Use Case (8 min) — Hedging is why futures exist. Airlines hedge fuel; farmers hedge harvests; funds hedge equity beta.
• Micro Futures — The Right Way to Start (7 min) — Micro contracts are 1/10th the size of standard e-minis, making futures accessible without abandoning leverage discipline.

Completion badge

Futures Fundamentals Certified: Awarded after completing every lesson in the Futures & Derivatives track. Educational simulation only — not financial advice.