Is there always a buyer and always a seller in the futures markets?

[johnymm]

I know clearing firms provide liquidity....but anyway what's the risk if I buy a futures today and not be able to sell it a later date?

10x

 

[N Rothschild]

depends what market, but yes u shud always be able to off load a futures position

 

[Adamus]

If you put in the order to sell at the market - you'll get a buyer eventually but there's no guarantee you'll like the spread or the fill.

What happens during 'fast' market conditions is that the buyers just disappear for a while - and then the ask drops and drops until the buyers think it's fallen far enough, and suddenly all the sell orders get filled down at the new price.

In a liquid market this all happens in seconds, but I guess in the Rough Rice pit or the New Zealand lambswool market, it might take longer for a buyer to act.

Or they might put in a really really low bid.

Or assuming that there is a book of limit orders waiting to be filled, if you put in a market order it will move the market down to the next Buy Limit. I don't know what would happen if there were no orders in the book. I guess you'd just have to wait.

 

[arabianights]

Not to mention that with a lot of futures markets there's a limit down... And then there will effectively only be sellers...

As a general rule, there probably won't be much of a bid when you need to get out, because everyone else needs to as well.