Going Long, Going Short
Futures contracts try to predict what the value of an index or commodity will be in the future. Various strategies are used by speculators in the Futures
Markets in order to take advantage of rising and declining prices. One of these common strategies is called "going long." This means that the investor enters a contract agreeing to buy and receive delivery of the "commodity" at a specific price. By doing this the investor is trying to profit from an anticipated price increase in the future. A second common strategy is called "going short." Here the investor enters into a futures contract by agreeing to sell and deliver the "commodity" for a specific price. Therefore, hoping to profit from declining price levels. By selling high now, the contract can be repurchased in the future at a lower price which generates a profit for speculators.
