Futures Trading Guide – Everything You Need to Know

June 3, 2010 · Posted in commodity trading · Comment 

Similar to the Options trading, Futures trading also deals with the trading of contracts or bonds. Its contract, which is known as the “Futures contract,” is an agreement between the seller and the purchaser regarding a specific product at a definite amount and time. This agreement however, is determined by the trading market.

Future trading guides are particular about the Futures price. As this type of trading is done in popular futures exchanges, the futures price greatly settles based on the law of supply and demand. This scenario happens between the buying and the selling of the bond, when the trends are drawn based on this economic law.

In this type of trading, the buyers and the sellers anticipate high prices in the future. Largely, the cost of the contract remains in effect during this market situation. Fluctuations of the value cause the bonds to go low. Thus, transactions in this type of market are largely reliant on the profit margin than those commodities involved.

Terminologies in the Futures trading guide are also pertinent to the investor’s venture. These terms involve essential methodologies, that should be understood by futures traders most especially the novice ones. Thus, in this Futures trading guide, these terms will be discussed thoroughly.

One of the key terms that a Futures trader should know is the “settlement price.” The “settlement price” is the official final price in the futures contract or agreement at the closing stage of the trading session. This price remains fixed for a specific date, as dictated by the trade in the Futures market.

The “settlement date” or the “delivery date” on the other hand, is the date of Futures deliverance. This very date is relevant to the bond’s deliverance.

Owners of the Futures bond are under obligation of obtaining and delivering bonds in accordance to the rules of the contract. This is then the obvious dissimilarity of the Futures trader from the Options trader for Options buyers have rights to their assets but they do not have any obligation at all. Options traders have the choice whether they are going to execute a contract or not. In the Futures trade however, the buyers and the sellers are under no force in settling contracts during the delivery date. The sellers give the assets to the purchasers upon finishing a deal. If the money has been settled in the Futures bond, loss-incurring positions are shifted to profit making.

These insights are just a few of the pertinent information in the Futures trading. There are a lot of information that needs to be discussed and studied before one can ensure success in the Futures trading. This Futures trading guide is just a piece of the pie that a Futures trader should eat before getting involved in bigger deals in the Futures trading market. There are many terminologies, strategies and methodologies that should be remembered to ensure great profits after every transaction. It is important that you would master them to avoid risks of financial loss.

Author: Jeff C Daniels
Article Source: EzineArticles.com
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Mini Futures Trading Strategy For Beginners

May 18, 2010 · Posted in futures and options · Comment 

Most people that find their way to the index future exchanges, come by way of trading stocks. As new market participants learn more about the stock markets, it’s inevitable they will hear about the futures markets, especially the S&P futures market. The S&P futures are not unlike a ring in a bull’s nose, wherever the ring goes, the bull will follow just as the equity markets will follow the S&P futures market. Because of this, most stock traders learn to keep one eye on these futures whenever they have open positions since they know when the S&P reverses direction, the rest of the market will most likely follow.

As stock traders gain more experience, some move toward the mini futures market, attracted to it’s liquidity, volatility and profit potential. Mini futures, better known as Emini contracts, are scaled down versions of the larger futures contracts with lower margin requirements, which makes them very popular with traders. Mini contracts trade on all three of the major exchanges: S&P, NASDAQ and the DOW. All three offer differing options to traders and most participants will eventually settle on one contract to trade exclusively.

Skills used with success in stock trading can be applied to mini futures trading and methodologies are very similar. Just as in stock trading, the most important strategy is to have a system in place. Although each trader has their own individual trading style, successful traders understand the importance of a trading system. All veteran traders use a system they designed or they use a system designed by other successful traders.

Learning to trade mini future contracts for new traders is best when a mentor is employed. Fortunately, technology has advanced enough that new traders can follow along with experienced traders during market hours to increase their skill levels and confidence. By utilizing the services of a mentor in a live mini future trading room, the new trader can watch as the veteran trader executes trades and explains why he is entering and exiting the market. Usually, the mentor will have a question and answer sessions after the cash markets have closed, allowing the novice trader to ask questions.

By utilizing the services of a mentor in a live trading room, the new trader can learn how to implement a system that produces more winning trades. By visiting http://www.eminiprofits.info, you can learn more about mini futures and system trading.

Futures Trading Offers Incredible Opportunity

May 6, 2010 · Posted in commodity trading · Comment 

In the current investment market, where tried and true stocks are faltering, now may be the time to expand your portfolio to include online future trading and future option trading.

Futures Trading?

Futures trading is essentially trading on the predicted worth of a commodity at a determined date. A futures contract is an agreement between two parties to buy or sell a certain amount of a commodity at a pre-determined price. In most such contracts, the deal is predicated upon the expectation that actual delivery of the commodity will take place in order to satisfy the terms of the contract.

Some futures contracts, however, ask for a cash settlement instead of delivery of the actual commodity, and these contracts are usually liquidated before the agreed upon delivery date in the contracts.

What is great about this type of trading trading is that it’s based on tangible objects and thus, the value of futures is set more on reality-based events than stock trading, which fluctuates on more intangible properties, such as the moods and emotions of investors.

Trading Futures Is Easy!

It has become incredibly easy thanks to the easy access offered by the internet and online future trading. Day trading over the Internet can be a tricky business, however, and there’s not a lot of margin for error for newbies. To get the best results from day trading futures, future option trading and stock market futures online, you need to find a site that can offer dependable advice from proven experts about the amazing opportunities offered by the online futures market.

When picking a trading site or a site offering tips on futures trading you need to consider how well the site fits your needs as an investor, the credibility of the information being presented and the user-friendliness of the site or the advice.

A good trading site offers a variety of easy-to-use, simple options for both long term trading and day trading futures. Money never sleeps and neither should your site, so good technical support and fail-safe infrastructure is a must. Because futures trading can be very confusing to the novice trader, it’s important to use a site that offers a quick reference for users or to have access to a good online tipsheet or newsletter.

Credibility is important in stock trading, so it is important that the site you turn to for advice is affiliated with real experts who have a proven track record in successful future option trading and in trading stock market futures as well.

The boom times may be over, but there is money to be made in the current economy by trading futures. With the right advice and a reliable Web platform, you can earn incredible gains in the futures trading market.

Author: Daniel Webb
Article Source: EzineArticles.com
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Methods of Online Futures Trading

May 3, 2010 · Posted in futures and options · Comment 

Nowadays, online futures trading is available and more advance which result to more benefits. The copied price deal on the futures market is always updated and because of this, person involve in trading receives clearness and speed of the market. Online futures trading is access in computer anytime and anywhere around the world and it support people to trade on the future market. Through internet, you can see the most recent information from different parts of the world with the comfort of the place where you belong and that is how online futures trading can offer you.


Futures Trading is a process used to eliminate threat from happening, when the market swings and online futures trading have the same meaning but more convenient. Futures contract is the agreement involving the buyer and seller about their asset at exact time and set-price. It also balance asset tactic to lessen failure caused by price stability. In general, futures trading passed the future exchange and future contract is consistent for the price, delivery and amount on every date and month. Futures Exchange provide definite normal characteristic contract to make a possible responsibility with no disposal of fixed assets in futures Trading.


The Major way of dealing, in futures contract is situate ahead of development by having the same and opposed transaction The Futures price in the market set by futures contract traders and has an expiration date where you can know immediately to online futures trading. Normally, expiration day is during the final Thursday of the month. There are three cycles offered by Futures Contractors, which are one month, two months and three months. The expiration of three months in a new contract established for trading and it is set during Friday that go after the Last Thursday.


Proper price discovery lean a hand to the development of futures trading that gives benefits for different people engaged where you can see fast on the online future trading. In addition, Futures Contract is much valuable for the procedure because it gives suggestion price that may succeed that can help to give a practical price.


Trading permit traders to examine the majority current exchange and traders can also arrange into the engine exchange trading and acquire the verification of the agreement which online futures trading can helps a lot for immediate results.


To guarantee the operation of the futures trading completed to the exchange, definite inbuilt method example of this is rolling settlement. Rolling settlement meaning that all the traders with uncompleted at the last part of the day are already established. The buyer and seller needs to pay for both safeties of two parties. Weekly agreement method is another method being used, meaning the traders dealings done in a week can take long time to think.


Many people learned and suggest that online futures trading can let anyone who finds it profitable to pursue but professionalism and education about it is necessary. You should know how to control emotions, have discipline, motivation, commitment towards online futures trading and non-online futures trading. Another good about online futures trading is you do not need to be physically present to purchase, sale, distribute and stock because you have the power of precise quantity of commodity without seeing them.


If you are searching for a good investment, online futures trading is a good one. It can give a positive result for an income rather than investing impartially. There are many benefits you can receive from online futures trading like the convenience where you can see on your computer screen about your position, account money and amount of margin needs for your projected trade. You can be sure about the control, accuracy and speed of online futures trading. Thousand of people are getting rich because of online futures trading where they invest small amount of money that can turn to be unexpected profit.

Online Trading Guide is the best place to go for tips and resources for online trading. Please visit our website at http://onlinetradeguide.blogspot.com/

The Significance of Future Trading

April 3, 2010 · Posted in commodity trading · Comment 

Future trading channels are very particular about the future price rates. Since this trading is done in famous futures exchanges, the price for future largely settles on the basis of demand and supply law. This situation happens between the trading of bond and contract, where the trends are made based on this fiscal law. In the future trading, the sellers as well as the buyers predict higher prices in future. For the most part, the cost of contract stays in effect throughout the whole market situation. Fluctuations in the value may cause lowering down of the bonds. Therefore, trading in this market is largely dependent on the profit margins than the cost of merchandise.

Futures trading terminologies are also important for the investor’s undertaking in this market. These terms includes essential methodologies, which should be clearly understood, especially by the novice futures traders.

“Settlement price” is one of the main term that is commonly used in the future trading. The “settlement price” is the final price established in the future agreement or future contract at the closing session of trading. This price is set for a specified date as ordered in the Futures market and remains unchangeable. On the other hand, the “delivery date” or the “settlement date” is the date of Futures deliverance of the bond.

Owners of the Futures contract are under the compulsion to obtain and deliver bonds as per the contract rules. This is completely different from the option trade, where the options buyers possess absolute rights to their assets and do not have any to undergo any type of obligation.

In the Futures trading, the buyers and the sellers are under no obligation to settle the contracts within the specified delivery date. On the completion of a deal, the sellers provide the assets to the purchasers. If money is settled in the Futures contract, then the loss incurring situations are changed to profit making.

The above mentioned features are just a small insight to the Futures trading. There is a plenty of information which needs to be studied and discussed before you can actually venture the future trading and become successful. There are many things that need to be considered before getting involved in the future trading market. You must be well aware of the terminologies, methodologies and strategies related with future trading to ensure higher profits in every deal. It is essential to master them well in advance to avoid any financial losses in future.

Author: Michael Antony
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Futures Exchanges – Knowing Where To Do Business

March 10, 2010 · Posted in commodity trading · Comment 

Good for you! You’ve been reading, you’ve put together a trading rules to lay the foundation for your futures trading plan and you’ve even been paper trading to prove your trading plan. Now you are ready to learn more about where you will be doing your business; it’s time to talk about the futures exchanges.

General Futures Exchange Information

As you know at this point, you will not actually do business with the futures exchanges listed below. You will work with your broker who will take your futures orders to the exchange floor for you. Since you have been paper trading, you probably have already established an account for commodities trading so we won’t go over that again. While there are futures exchanges throughout the world, we will focus on the ones in the US. The markets we will outline are in Minneapolis, Kansas City, New York and Chicago.

History of Futures Exchanges in the US

The modern futures trading began in Chicago, IL in the early 1800s. Chicago, with its location at the base of the Great Lakes, is close to the farm of the U.S. Midwest which made it a natural center for transportation, distribution and trading of agricultural produce. Gluts and shortages of these products caused extreme changes in price. An exchange was needed that would bring together a market to find potential buyers and sellers of a commodity instead of making people bear the burden of finding a buyer or seller. In 1848, the Chicago Board of Trade (CBOT), the world’s first futures market, or futures exchange, was formed. Trading was originally in futures and the first contract was written on March 13, 1851.

Futures Exchanges

Different futures exchanges trade different commodities. In addition, each future exchange accepts different futures orders. Since not every exchange allows every order it is necessary to talk with you broker about which orders are permitted in the markets you trade. The following is a list of the major commodity exchanges, their commodities, and the orders that they accept:

Chicago Board of Trade

Location: Chicago, IL

Commodities

o Corn

o Oats

o Soybeans

o Soybean Oil

o Soybean Meal

o T-Bonds

o T-Notes

o Muni Bonds

o 5 Year Notes

o 2 Year Notes

o DJIA Index

Acceptable orders: Market, Market on Close, Limit, Stop, and Fill or Kill Orders

Chicago Mercantile Exchange

Location: Chicago, IL

Commodities

o Live Cattle

o Lean Hogs

o Lumber

o Feeder Cattle

o Pork Bellies

Acceptable orders: All futures orders are acceptable.

Index and Option Market

Commodities

o S&P 500

o Mid-cap 400

o NASDAQ 100

Acceptable orders: All futures orders are acceptable.

International Monetary Exchange

Location: Chicago, IL

Commodities

o T-Bills

o Euro Dollars

o Canadian Dollar

o Euro Currency

o Australian Dollar

o Mexican Peso

o Euro Yen

o Japanese Yen

o British Pound

o Swiss Franc

Acceptable orders: All futures orders are acceptable.

New York Comex

Location: New York, NY

Commodities

o Copper

Acceptable orders: For Copper only, acceptable are Market, Market on Close, Limit, Stop, and Fill or Kill.

Commodities

o Gold

o Silver

Acceptable orders: For Gold and Silver, acceptable are Market, Market on Close, Limit, Stop, and Fill or Kill. Stop Limits are acceptable only on a not-held basis.

New York Cotton Exchange

Location: New York, NY

Commodities

o Cotton

o Orange Juice

o Dollar Index

Acceptable orders: Market, Market on Close, Limit, Stop, and Fill or Kill.

New York Coffee, Sugar & Cocoa Exchange

Location: New York, NY

Commodities

o Coffee

o Sugar

o Cocoa

Acceptable orders: All futures orders are acceptable.

New York Mercantile Exchange

Location: New York, NY

Commodities

o Unleaded Gasoline

o Platinum

o Palladium

o Heating Oil

o Crude Oil Natural Gas

Acceptable orders: All futures orders are acceptable.

New York Futures Exchange

Location: New York, NY

Commodities

o New York Stock Exchange Index

o CRB Index

Acceptable orders: All futures orders are acceptable.

Kansas City Board of Trade

Location: Kansas City, MO

Commodities

o Kansas City Value Line

o Kansas City Mini Value Line

Acceptable orders: All futures orders are acceptable.

o Kansas City Wheat

Acceptable orders: Market, Market on Close, Limit, Stop and Fill or Kill.

Minneapolis Board of Trade

Location: Minneapolis, MN

Commodities

o Minneapolis Wheat

o Minneapolis White Wheat

Acceptable orders: All futures orders are acceptable.

Author: Stephen Bigalow
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Simulated Futures – Perfect for Beginners

February 17, 2010 · Posted in commodity trading · Comment 

Are you interested in making money with futures trading? If you are, you are definitely not alone. Commodity trading is reaching an all-time high in popularity. Although many individuals are able to make a profit with futures trading, there are also those who end up losing money. To help ensure that you make money, as a beginner, not lose it, you will want to make sure that you know exactly what you are doing. You can not only do this by thoroughly researching futures trading and the futures market, but you can also do it by participating in a simulated futures programs.

As a beginner, you may be wondering exactly what a simulated futures program is. In short, a simulated futures program is a program that allows you to practice futures trading, but without risking any “real,” money. Simulate futures programs are available through many futures brokers. Many futures brokers allow their prospective clients to use their simulated futures program free for a short period of time, typically around thirty days. If, after that point, you still think that you need more practice, you should be able to continue on with your futures simulated program, but for a small fee.

Although it is nice to know how you can participate in a simulated futures program and have a generalized idea of what one is, you may be looking for more information, particularly why it is good for beginners, like you. As it was previously mentioned, a simulated futures program is a practice program that those just getting started in futures trading are advised to use. While each simulated futures program may very, often depending on the futures broker offering the program, many programs function in similar ways. For starters, you are given a test account, with “fake,” money that you can use like “real,” money to make trades.

When using a simulated futures program, you will have access to the same information and the same tools as a real, paying trader would. This is where the practice comes in. This practice and its value are immeasurable. With simulated trading, you are able to see which trades or moves of yours were good or bad. For instance, if you were to make money or a wise trade, you would likely remember your actions and keep them in mind for future use. The same can also be said for losing money or making bad trades. The information that you learn in a simulated futures program may help you become a successful futures trader.

Although many simulated futures program participates receive valuable hands-on information, which makes it easier for them to be successful when they start trading, there are others who realize that futures trading may not be for them. That is another reason why simulated futures programs are ideal for beginners. Unfortunately, many beginners learn about the ability to make money with the trading of commodities and they automatically assume that they can do the same, but futures trading isn’t right for everyone. That is why, if you are just getting started in futures trading or just learned about it, you may want to first try a simulated futures program.

Author: Ulysses Faust
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Real Time Futures – Why It Should Impact Your Futures Broker Decision

February 14, 2010 · Posted in commodity trading · Comment 

Are you interested in trading futures? If you are, you may also be interested in using the services of a futures trading broker, as they provide you with the knowledge and assistance needed to be a successful futures trader. The good news is that you have a number of different futures brokers to choose from. The bad news is that you have so many brokers to choose from that you may have a difficult time making a decision.

The first step in choosing a futures broker is to actually find one or a number of them. If you are looking for a local futures broker, you can use your local phone book. For a larger number of futures brokers, you may want to think about using the internet, particularly online business directories or standard internet searches. Once you have the contact information for a futures broker or their website address, you can begin to further investigate or research them.

When it comes to further researching a futures broker, there are a number of obvious things that you will want to look for. For instance, you will want to do business with a futures broker that is affordable, as well as one that has a good reputation. One point that you may not necessarily think about is real time futures. Of course, it isnt necessary, but you may want to think about doing business with a futures broker that relies on real time futures. Real time futures is often considered a tool; a tool that you, as an investor, can benefit from.

When looking for a futures broker that uses real time futures, you will need to examine the services provided. Real time futures often involves having the futures market, as well as current commodity prices, and futures investing news updated, in real time format. Many futures brokers who use real time futures operate online, as it is easier to keep their information updated and in real time format. In most cases, you can look at the online website of a futures broker and see, right away, if they have real time futures information.

As a reminder, real time futures isnt necessarily required, but it is something that you may want to closely examine. If you are able to find a futures broker, particularly one that uses real time futures, you are advised to thoroughly examine their online website. You will want to look for trader accounts that you can open, as well as their costs. If you have any questions or concerns, most futures brokers are available to offer you assistance or answer any of your questions.

Author: Ulysses Faust
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What You Need To Know When Trading Derivatives And Futures

February 11, 2010 · Posted in commodity trading · Comment 

The Derivatives and Futures Market is the most potentially profitable market in the world. But it can be the most distructive one too!

Derivatives

A derivative is a financial term for a specific type of investment from which the price over a certain time is derived from the performance of the underlying asset such as commodities, shares or bonds, interest rates, exchange rates or indices like stock market index or consumer price index.

This performance can determine both the amount and the timing of the payoffs. The diverse range of potential underlying assets and payoff alternatives leads to a huge range of derivatives contracts available to be traded in the market. The main types of derivatives are Futures, Forwards, Options and Swaps.

Futures

A futures contract is a standardized contract, traded on a futures exchange
to buy or sell a certain underlying asset. at a certain date in the future, at a pre-set price.

The future date is called the delivery date or final settlement date. The pre-set price is called the futures price. The price of the underlying asset on the delivery date is called the settlement price. The futures price, normally, converges towards the settlement price on the delivery date.

A futures contract gives the holder the right and the obligation to buy or sell, which differs from an options contract, which gives the buyer the right, but not the obligation, and the option writer (seller) the obligation, but not the right.

In other words, the owner of an options contract can exercise (to buy or sell) on or prior to the pre-determined settlement/expiration date. Both parties of a “futures contract” must exercise the contract (buy or sell) on the settlement date.

To exit the commitment, the holder of a futures position has to sell his long position or buy back his short position effectively closing out the futures position and its contract obligations.

Futures contracts, or simply futures, are exchange traded derivatives. The exchange acts as the counterparty on all contracts and sets margin requirement etc.

Forwards

A forward contract is an agreement between two parties to buy or sell an asset (which can be of any kind) at a pre-agreed future point in time. Therefore, the trade date and delivery date are separated. It is used to control and hedge risk.

One party agrees to buy, the other to sell, for a forward price agreed in advance. In a forward transaction, no actual cash changes hands. If the transaction is collaterised, exchange of margin will take place according to a pre-agreed rule. Otherwise no asset of any kind actually changes hands, until the contract has matured.

The forward price of such a contract is commonly contrasted with the spot price which is the price at which the asset changes hands ( on the spot date, usually the next business day ). The difference between the spot and the forward price is the forward premium or forward discount.

A standardized forward contract that is traded on an exchange is called a futures contract.

Futures vs. Forwards

While futures and forward contracts are both a contract to trade on a future date, key differences include:

Futures are always traded on an exchange, whereas forwards always trade over-the-counter.

Futures are highly standardized, whereas each forward is unique.

The price at which the contract is finally settled is different:.

Futures are settled at the settlement price fixed on the last trading date of the contract (i.e. at the end)

Forwards are settled at the forward price agreed on the trade date (i.e. at the start)

The credit risk of futures is much lower than that of forwards:

Traders are not subject to credit risk due to the role played by the clearing house. The profit or loss on a futures position is exchanged in cash every day. After this the credit exposure is again zero.

The profit or loss on a forward contract is only realised at the time of settlement, so the credit exposure can keep increasing

In case of physical delivery, the forward contract specifies to whom to make the delivery. The counterparty on a futures contract is chosen randomly by the exchange.

In a forward there are no cash flows until delivery, whereas in futures there are margin requirements and periodic margin calls.

Options

An option is a contract whereby one party (the holder or buyer) has the right but not the obligation to exercise a feature of the option contract ( e.g. stocks ) on or before a future date called the exercise or expiry date.

Since the option gives the buyer a right and the seller an obligation, the buyer has received something of value. The amount the buyer pays the seller for the option is called the option premium.

Most often the term “option” refers to a type of derivative which gives the holder of the option the right but not the obligation to purchase (a “call option”) or sell (a “put option”) a specified amount of a security within a specified time span. (Specific features of options on securities differ by the type of the underlying financial instrument involved)

Swaps

A swap is a derivative where two counterparties exchange one stream of cash flows against another stream. These streams are called the legs of the swap. The cash flows are calculated over a notional principal amount. Swaps are often used to hedge certain risks, for instance interest rate risk. Another use is speculation.

Swaps are over-the-counter (OTC) derivatives. This means that they are negotiated outside exchanges. They cannot be bought and sold like securities or future contracts, but are all unique. As each swap is a unique contract, the only way to get out of it is by either mutually agreeing to tear it up, or by reassigning the swap to a third party. This latter option is only possible with the consent of the counterparty.

Author: Ricky Schmidt
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Understanding Futures Trading

February 8, 2010 · Posted in commodity trading · Comment 

Many people have the notion that commodity futures trading is very difficult to understand. It may only seem difficult when you are new to futures trading, but once you understand the inner workings and get a hang of it, you will be well on your way to success.

People have a common misconception that commodity exchanges determine or establish the prices at which commodity futures are bought and sold. This is not true. Prices are determined by supply and demand conditions. Just keep in mind that if there are more buyers than sellers, prices will be forced up and vice versa.

Buy and sell orders, which originate from all sources and are channeled into the exchange-trading floor for execution, are actually the ones to determine the prices. These buy and sell orders are translated into actual purchases and sales on the trading floor.

The major function of the futures market is the transfer of risk, and increased liquidity between traders with different risk and time preferences, for instance from a hedger to a speculator. Futures trading is a method used to eliminate or minimize risks that occur when the prices in the market fluctuates.

Futures contracts are exchange-traded derivatives. A futures contract is traded on a futures exchange, to buy or sell a certain underlying instrument at a certain date in the future, at a pre-set price. Futures contracts are basically for assumption or hedging.

There are two groups of futures traders: the hedgers, who are interested in the underlying commodity and are seeking to hedge out the risk of changes in price; and the speculators, who are interested in making a profit by predicting market moves and buying a commodity “on paper” for which they have no practical use. For example, commodities in the market can be bought today at today’s price, with the speculation of selling them at a higher price in the future.

On the other hand, hedging protects against fluctuations in market prices. This protection is made by allowing the risks of price changes to be transferred to professional risk takers. For instance, a manufacturer can protect itself from price increases in raw materials they need by hedging in the futures market.

Hedging has two types, hedge sale and hedge purchase. A person can buy a commodity and sell futures at the same quantity as protection against fluctuation in prices when he is still holding the stock.

You might think that this is gambling, but the fact is that speculation refers to the condition of a legitimate enterprise based on the current condition of the market trends. However, it is very risky for inexperienced futures traders who try to predict the market and speculate without having enough resources or experience.

Since the prices are distributed via telecommunications network and the internet, it makes online futures trading very convenient and simple for an individual. Nowadays many brokers offer their services for trading commodity futures online. Because more risk is involved in online futures trading than stock trading, you must judge for yourself whether or not it is worth the added risk of trading commodity futures online.

Keep in mind that an investment in futures can result in losses. Past performance results does not necessarily indicate future performance results.

Author: Susan Jan
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