In futures trading, the investor must be able to understand contracts and the concept of agreeing to delivery of future goods or services. The investment is made when the buyer agrees to purchase a commodity at a set price determined by today’s market. When the contract matures and the buyer takes ownership, if the market price is now higher, he has made money. If the price dropped between purchase and receipt, the buyer loses money.
Actually taking physical possession of the product is uncommon. Some of the most frequently traded futures commodities across a number of categories include gold, oil, and coffee.