Futures contracts are leveraged instruments that can be used to control risk.

Question

Quizplus · Accepted Answer

Futures contracts allow traders to control a large amount of an underlying asset with a smaller amount of capital. This leverage can be used to manage risk by hedging against potential price movements in the market. However, it is important to understand the risks associated with trading futures contracts, including the possibility of significant losses.

Futures Contracts Are Leveraged Instruments That Can Be Used to Control