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Contracts (Options and/or Futures)

Futures contracts are available for a wide range of financial assets, including precious metals and equity indexes. Depending on which way investors predict an underlying product will move, trading options based on futures entails either buying or writing call or put options. A way to benefit from the movement of futures contracts is by purchasing options, which is much less expensive than purchasing the actual future. If investors believe a future's value will rise, they will buy a call. If investors anticipate a future's value to decline, they will buy a put. The premium is what investors pay to purchase the choice. Option writers are also traders.

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