Skill: Futures Trading | Domain: trading | Category: asset-class | Level: intermediate Tags: trading, asset-class, futures, contracts, rollover, contango

Futures Trading — Asset Class Reference

Contract Mechanics

• Expiry: Futures expire on a fixed date (quarterly for index/rates, monthly for commodities)
• Rollover: Roll to next contract before expiry (typically 5–10 days before)
• Basis: Difference between futures price and spot price
• Contango: Futures > Spot (normal for commodities with storage costs)
• Backwardation: Futures < Spot (supply squeeze signal for commodities)