Even if you don't trade futures, understanding them can help you be a more alert investor in the stock market. For instance, futures contracts on the Standard & Poor's 500 index that trade before 9:30 a.m. Eastern time can point to the initial direction of US stocks. Looking at the market prices for crude oil to be delivered next month might help you see the market's best guess for the direction of energy prices.
This is a feature of futures trading known as price discovery - the machinations that ensure, in most cases, that the price reflects the market's true assessment. Also, your mutual fund manager may use forward contracts to hedge or speculate, so learning the language can help you understand what your money manager is up to.
