For investment professionals such as Steven Zoernack, understanding and making sound decisions in futures trading is part of the job. However, for the average investor, understanding what a future refers to in finance and knowing how to select, buy, and sell it properly can be much more complicated. As Steve Zoernack knows, futures investments can be risky but can also provide a solid return if transacted with confidence.

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.