How Futures Trading Really Work (Full Beginner's Guide)

In this video, we break down how futures contracts actually work, how leverage and margin affect your money, and why futures can create both opportunities and significant risks. Whether you're completely new to futures or want a clearer understanding of futures contracts, long vs short positions, margin, mark-to-market, contract size, tick value, contango, backwardation, and margin calls, this video walks through the mechanics step by step in simple language. We’ll also explain what happened during the historic 2020 oil futures crash, when the price of a crude oil futures contract briefly went negative, and why physical storage played such an important role. 0:01 Intro 1:08 What Is a Futures Contract? 2:04 Futures Contracts vs Options 2:25 Hedgers vs Speculators 3:25 Types of Future Contracts 4:16 Going Long vs Going Short 5:04 Example of Futures Contract 6:18 Physically Settled vs Cash-Settled Futures 6:48 Daily Mark-To-Market 7:06 Contract Size & Tick Size 8:24 Futures Margin & Leverage 9:23 Initial Margin vs Maintenance Margin 9:55 Margin Call 10:25 Futures Price vs Spot Price 10:50 Contango vs Backwardation 11:24 How Oil Futures Went Negative in 2020 12:12 The Biggest Risks of Futures Trading 13:51 Conclusion 📈 Invest with Webull! Deposit $500 & Receive $20 worth of fractional shares + 1 month of Webull Premium🚀 https://www.webull.com/k/MartikFinance 💰 Invest with Moomoo & Receive Up To 30 Free Stocks! 🤑 https://start.moomoo.com/0eflId 🔍 30$ discount on Seeking Alpha Premium (Best Stock Research 📈) https://link.seekingalpha.com/4HBD5TR/4G6SHH/ 📢 50$ discount on Alpha Picks https://link.seekingalpha.com/4HBD5TR/4HKP84/ ⭐$156 discount: Premium + Alpha Picks https://link.seekingalpha.com/4HBD5TR/4JZKZP/ Moomoo is a trusted, legally registered platform and a subsidiary of Futu Holdings, a company listed on the NASDAQ. Webull Financial LLC, Member SIPC, FINRA. Investing involves risk. (These are affiliates links, which means I get a commission for each purchase. See Terms & Conditions) 📊 Next Watch: 👉 https://youtu.be/osnZVQ5MbiE 👉 https://youtu.be/UC-OkNBFNx4 💡 Don’t forget to like, subscribe, and hit the 🔔 bell icon for more easy-to-understand investing videos! *Disclaimer:* This video contains affiliate links, which means I may earn a small commission if you fund your account through them. Please invest responsibly and always conduct your own research before making any financial decisions. The content on this channel is for entertainment and informational purposes only. It is not intended to provide investment or financial advice, or recommendations regarding specific securities or investments. Always consult a qualified financial professional before making any investment decisions. Every investment involves risks.