Futures trading has become a very popular method for people to have some form of financial security. There is no doubt that we are currently faced with the toughest economic crisis after the great depression. This has seen many to lose their jobs. Those that are still found with a job are in no better position, as due to an increase in expenses; they are in the same “boat” as those without a job. For this reason, many people have started to look at possible ways by which they can make some extra money on the side that can help ease their burden. This is where futures trading come into play.
One thing that you have to understand about futures trading is that this is a side job as many people would like to call it. Futures trading is seen as that extra money making machine that allows you to have disposable income at the end of every month. Now there are many ways that you can make use of this service. The whole idea behind such trading is to predict whether or not the value of a particular market will rise or decrease in the future. The great thing about this form of trading is that you are not limited by only investing in shares and stocks. You are exposed to a more versatile market that includes commodities such as currency, gold, cotton etc.
One market that has been particularly favoured for many years in futures trading is the market of foreign currency. Now you may be wondering what difference is there in trading in currency through futures trading in comparison to stocks and shares. The only problem with stocks and shares is that you can not really see a decent profit unless you invest a large amount of money. Now yes this does give you a great chance to make high returns, but then again there is always the risk of losing a lot of money as well. Not to mention that you will be looking at a minimum time frame of about a year before you see any form of real profit.
This is the great thing about futures trading in currencies. Even though the market may be fairly volatile in futures trading in currencies, there still is a lot of money to be made. The great thing about trading in currency is that you are not bound to wait for long periods of time before you see results. If you know what and when to trade, you could see your self making a handsome profit within a couple of hours. It really is that simple.
If you want to make use of futures trading, then the best place to start looking is online. There are many online websites that will give you more information on futures trading and how it can benefit you and your family for the better. If you were looking for financial security in these tough times and thought it was impossible, well think again.
Posts Tagged ‘Futures’
How to Benefit With Currencies in Futures Trading
Fundamentals of Futures Crude Oil Prices
To talk about oil trading, I bet that this topic will get much concern from you guys since crude oil futures are among the most popular and widely watched futures markets. You know, there isn’t a day without the mention of crude oil prices on the television, in newspapers or magazines. This shows the importance of this market to everyone. How about you? If you have decided that speculating in crude oil is something suitable for your risk capital. You will want to learn as much as possible about crude oil futures. There are more than a few things that can affect crude oil prices. Now, we will together check out some fundamentals worth noting if you are trading futures crude oil.
Supply and Demand
Domestic demand and global demand both affect on crude oil price. Over the last decade, emerging markets like China and India have increased demand for crude oil and so this led many speculators to suggest that demand would outpace supply. On the domestic side, the regular reports from the EIA on refining activity and crude oil supply have direct impact on crude oil price and also crude oil futures price volatility. Released weekly, EIA reports and API reports are often key fundamental influences on crude oil futures markets.
OPEC Output
OPEC as all of us know that is The Organization of the Petroleum Exporting Countries. From its name, we all can be sure that its activities wil have strong effect on oil market. Opec production levels and promises for production can also add volatility to crude oil prices. Even a scheduled OPEC meeting and speculation about increases or cuts to oil production can impact crude oil futures markets.
Weather
That sounds strange that weather can affect oil price, but it will. Storms in the Gulf region of the United States as well as the North Sea can halt production of crude oil both on drilling platforms as well as refineries which may be shut down anticipating the arrival of a bad storm. Events like Hurricane Katrina stand as strong examples of how weather may have a direct impact on crude oil price.
Geo-Political Issues
Tensions in oil producing regions or near pipelines or refineries can also cause changes in crude oil prices as investors weigh the possibility of supply interruptions. Pipeline attacks or oil tanker hijackings are some past examples. Political tensions and war in the Middle East also influenced crude oil price in the past.
Refinery Repairs or Issues
I think you can predict this fundanmental already. Yes, when pipelines or refineries are shutdown for any reason, this can disrupt supply and cause crude oil prices to fluctuate.
These are situations you will want to be aware of when trading crude oil futures as they can impact crude oil price and increase volatility. It can be worth watching for these events since crude oil futures trading can be incredibly risky even without events such as wars or hurricanes to increase volatility. For help, check out energy commodity prices to not miss the market!
How You Can be Part of the World Economy Through Futures Trading?
Have you ever wondered how the world economy is affected? I mean it isn’t something that you would expect to read in a newspaper, but there are always signs that the world economy is either rising or falling. An example would be through the foreign currency exchange. When a currency is doing well, the price conversion rate that it would give in comparison to another currency would be high and vice versa. Now in previous years it was very difficult for the general public to be involved with such investments, however that was a thing of the past. Thanks to futures trading, any member of the public can invest in a large number of commodities that could not be possible a couple of years ago. Futures trading is known to include markets such as gold, steel, wheat, currency etc.
As you can see from the list above, one is not short on choice on which futures trading market to invest with. The thing is that these markets are the ones that go under the radar, which is why they have not been fully exposed. It is more common for one to see stocks and shares on the TV and newspaper instead of the markets being offered by futures trading.
Now you may wonder how one can make money through futures trading? It is quite simple to be fair. All it requires is for you to be able to predict whether or not the chosen market through futures trading is either going to rise or fall. It is important to understand that you can’t just go around guessing how the market will act as this way you will loose a lot of money. It is important that you take the time to sit down and do your market research before you make any judgements. Even though no one can predict the future, with careful analysis, one is still able to predict the possibility of market change by up to 97%.
If you are deciding to make use of futures trading then there are many ways that you can go about it. The best way to get involved with futures trading is to start having a look online. There are many places that offer a wide range of information and services that can help get you started with your trading career. One thing that you have to keep in mind is that this form of trading is like an extra part time job. The whole idea of investing in this form of trading is to secure your long term future.
Now you may be asking why futures trading. The great thing about futures trading is that you have the choice of either investing big or small. You can easily set the risk levels that you would want to take and accordingly see your profits grow. In comparison to stocks and shares for example, you won’t see yourself waiting for a year before you see some real profits.
What are futures in the stock market?
Every morning before the stock markets open, CNBC and yahoo finance and others predict how the market will open by looking at futures or some other factors that i cant understand. Can someone please explain what futures are and how financial channels predict how the market will open/be for the day?
Futures Trading Strategies
Every investment calls for caution, good understanding of the various options, market conditions and tips and strategies to be implemented to gain maximum benefit out of the investment. Trading in derivatives like futures requires extra vigilance and insight into its trading strategies. Let’s look at specific futures trading strategies that are proven to be beneficial.
Futures are standardized contracts either to buy or sell a particular asset at a future date for an agreed price. The underlying asset can either be a commodity or in case of financial futures assets can be securities, bonds, currencies, stock indexes etc.
Strategies:
Position – taking a position, either long (to buy) or short (to sell) on a futures contract is one of the most frequently used strategies. Going long entails buying a futures contract to hold till the price reaches the target and selling it in future for a profit.
Margin – Trading futures on margin is advisable. Usually a percentage of the contract value, as decided by the exchange, is paid as margin amount and price variations are adjusted to that margin.
Spread – This common strategy involves a trader buying and selling future contracts for the same commodity. The main goal of the strategy is to take advantage of the difference in the cash and futures market. Spreads can also be used for different commodities.
Tips to effectively use futures for hedging
• As expiry date approaches, difference between the prices in futures market and cash market diminish and thereby hedging ability also lessens.
• In case of contracts for physical settlement- delivery of the underlying asset, it is advisable to hold the position till maturity.
• One must incorporate additional caution in case of hedging a position further than the expiry date in longest time to expiry contracts.
• While taking out of a position, one must analyze the effect on margin.
Each kind of future contracts requires a unique strategy, hence a comprehensive knowledge of futures trading is recommended.
Futures Trading Contracts
Futures trading contracts are normally classified into two types – Commodities and Treasuries. The term commodities refer to the contracts traded for physical delivery. Also known as financial instruments, Treasuries, are futures contracts ended with a cash settlement. Futures contracts can be traded directly and electronically.
Commodity futures contracts follow the same trading principles of shares of a stock market. The only difference is that every commodity contracts end in delivery. Its online trading version always depends on speculators and hedgers.
The commodity futures trading put some obligations on the buyers and sellers. The buyer is responsible for taking delivery and paying for the cash commodity during a fixed time period. The seller is responsible for delivering the commodity, for which he/she will be paid the price that was decided in the exchange pit by the dealers.
Commodity futures create a contract to sell or buy the goods for a fixed price by a certain date in the future. This contract period is the major reason of the huge potential for profit and loss. Future trading also involves all the exciting aspects of trading, as it intrinsically occupies predictions of the future and consequently uncertainty and risk.
Treasuries Futures contracts, which is traded for cash settlement, include treasury notes, bonds, short sterling, gilt, euribor, etc. These types of contacts are also popular by the name ‘currency futures’. These contracts are generally traded through electronic platforms.
Oil, grain and metal contracts are same example for the Commodity Futures trading. Soybean, sugar, oats, corn, wheat, etc are example for agricultural commodities. Future oil contracts include crude oil, heating oil, natural gas, etc. Examples for commodity metal contracts are gold, silver, platinum, etc.
This article is written for www.orientfinance.com. Orient Financial Brokers (OFB) S.L.P. conducts brokerage in Foreign Exchange, Futures, and Commodities in the Middle East.
Speculators Take Risk In Futures Trading
Futures contracts certainly are a a novice market instrument, with all the inception starting around 1859, they’ve become popular along with something known as the forward contract. These specific contracts are legally binding resolve for buy or sell (deliver or accept) commodities, shares, bonds, currencies, precious metals, tangible commodities and much more, also added within the contract is the future date this transaction will need place. These will always be traded in the regulated futures exchange, but naturally will vary based upon the actual asset.
Future contracts may also be set with a pre-determined price. Future trading and forward trading are extremely similar, however will also be quite different. Both are agreements between two parties, the location where the future is traded in the regulated exchange, nevertheless the forward contract is manufactured between private parties and non-regulated, often one party will default.
There are two forms of contracts in trading futures, one being single as well as the other being multiple. The single futures contract could be the smallest unit that may be traded, and will be as small as one share. Multiple futures is normally utilized by seasoned investors are as they state, multiple shares, stocks, etc. The investor will either go long or go short when getting into the contract. Going long is if the trader believes the values will rise. Going short may be the complete opposite of going long. He enters the contract in the position the costs are going to decline.
The two significant reasons for that availability of future trading are that investors may be hedgers or speculators. Hedging is the strategy of opening opposing positions in underlying instruments to reduce the volatility of one’s’ portfolio thus reducing risk. Hedgers are attempting to reduce and sometimes even eliminate their risk. The speculator will need the danger that the hedger is avoiding. Speculators undertake the risk involved to be able to make profit in the underlying assets.
In conclusion, futures contracts and future trading are standardized contracts, which commit too parties towards the delivery of a product on the set date in the foreseeable future in a set price. It also offers the ability for your investors that need to reduce their risk (hedgers) by transferring the danger over to the investors (speculators) whom are prepared to take this risk with the hopes of generating money.
NSE F&O turnover at Rs 1,505.90 bn on Mar. 03
Index futures saw a trading volume of Rs 225,348.3 million arising out of 869942 contracts and Index options saw 3,821,988 contracts getting traded at a notional value of Rs 1,058,961.5 million. The total turnover of the Futures & Options segment of the Exchange was around Rs 1,505,907.3 million. Instrument wise summary: Index Futures
Posted in Online Stock Trades 
Tags: arising-out, exchange, Futures, notional-value, options-saw, total-turnover, trading-volume, wise-summary 
Comments OffFutures Trading And The Concept Of Speculating
Futures trading is a type of investment that involves predicting the future value of various types of goods and services.
Futures trading as we know it today evolved from farmers selling their crops to dealers and committing to future exchanges of goods for a set price. A farmer would, for example, agree to deliver a few kilos of a certain produce, like wheat or barley, to the buyer on a future date.
This type of agreement was beneficial to both parties as the farmer knew how much he would be paid for his produce and the buyer could plan costs in advance. The two parties may have exchanged a written contract, now known as a futures contract.
Futures contracts soon became commonplace and were used as collateral for many different products and services. It then became possible for these contracts to change hands before the delivery date was reached. If the buyer decided they didn’t want whatever it was they had bought then the contract could be sold to someone else who did need the goods in question. This situation also works vice versa for the person selling their commodities.
The price for goods and services would increase and decrease depending on what was happening in the market and before long people who had no intention of ever buying goods or services began trading the contracts and thus the concept of futures trading was born.
Futures trading is therefore a type of investment which involves speculating on the price of a certain commodity going up or down in the future. The type of commodity varies widely and could even be something you see and use in everyday life; from cotton used to make clothes, wheat used in bread or the gold that is used to make jewellery, there are thousands of different commodities that you could choose to trade in.
All of these different commodities are traded every day between hundreds-of-thousands of investors from all around the globe. The aim of futures contracts trading is to make a profit by buying a commodity at a low price and then selling it on at a higher price.
Futures trading is also referred to as ‘paper’ trading or investing because it is rare for investors to actually hold the physical commodity, it is generally a piece of paper known as a futures contract that is bought and sold.
Futures contracts are bought and sold before they reach their expiry date and many short-term traders only hold their contracts for a few hours, or even minutes.
The expiry dates of different commodities vary so you are able to choose the contract that suits you best. The closer a commodity is to its expiry date the more liquid it generally is and prices are therefore truer and less likely to fluctuate.
Shares can be traded in a similar way and this is called contracts for difference (CFDs) trading. CFDs trading allows you to make money on share price movements without actually buying the shares.
This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as advice or used to make financial decisions. Expert financial advice should always be sought and any links contained within this article are included for information purposes only.
What determines the stock futures?
Every day the futures are up, they’re down, they are reacting to economic news. They are indicating the opening….
How does this happen. Who is the man behind the curtain measuring this data and what is the data? It’s instantaneous to a jobs report or a housing number…how does it work?
Thanks for any help. For the record I’m not a poor slob looking for homework help, rather a middle age woman that is curious on how this occurs.
Online Futures Trading…methods And Systems
Today, with online futures trading, we have instantaneous results which provide greater benefits for the trader. This of course results in worldwide access. Before we address possible methods, we must first recognize the players in this high stakes game of commodities.
Since most individual traders are speculators, here is a list of some of the advantages and disadvantages of the futures market over other investment possibilities. (If you are not knowledgeable about futures, and would like to know more about the futures market in general, please refer to my article: Futures Trading…Know The Market Before The Experts.)
1. The possibilities exist that a person can make more money faster in the futures market, because the speed of prices tends to change faster than stocks. Conversely, bad judgment can cause one to suffer greater losses than traditional investments.
2. Futures are highly leveraged investments. The trader only puts up about 15-20% as a margin, yet still being able to ride the full amount of the contract. Unlike stocks where at least 50% of its value has to be put up, and the investor pays interest on the difference between the margin and the full contract value.
3. For the most part there is no inside trading. Everyone has the same insider’s information on the weather, for example. This is an open outcry market, very public, which insures a fair outcome.
4. Commission charges on futures trades are small compared to other investments, and the investor pays them after the position is liquidated.
5. Most commodity markets are very broad and liquid. Transactions can be completed quickly, lowering the risk of adverse market moves between the time of the decision to trade and the trade’s execution.
Most traders that fail, do so because they don’t have a realistic plan. Hopefully by the end of this article you will have the knowledge to be able to devise a program that will reap huge profits, by trading futures correctly.
As with anything you pursue, attitude is a key ingredient. Makesure you understand that although this opportunity is a way to gain great wealth, you must never forget about the risk. Risk is good! Remember if you have knowledge and training you will welcome the risk. Remember too, that this is not for day traders. You will be working the trend not the rush.
The Breakout System
The Breakout System works. It has worked since the beginning of trading. Most novice speculators don’t use the breakout system, and that’s why 90% of them lose money. The good news for you is that if you learn to use this system you will conquer the futures market. The breakout system is based on human psychology so discipline is vitally important. This is where most traders fail. You must develop the confidence to stick with their system.
You must have some of that river boat gambler in you, and develop guts and staying power. Most beginner speculator’s want to take as little risk as possible, and they always get stopped out before the trade has a chance to mature. You need to take risks to make big gains! Work your plan and see it through to the end.
Options will give you the best opportunity. You must use options in the right way though, with plenty of time value, buying them at, or close to the money.
Choose the Right Tools
You also need the right tools to go with your knowledge. Any training you receive should be for technical analysis, or you are just wasting time and money. As far as software platforms, the following suggestions I strongly feel are necessary for any software to be useful.
1. It must be able to offer live streaming technical data. (Otherwise the program is merely educational) 2. The platform should defiantly include candlestick charting.3. Visually it has to be large enough for all the data to be seen easily. (Many of the online brokerage’s technical data are too small to be useful) 4. It must be cost effective. (Most good systems can be purchased for between one and two hundred dollars)
These are just a few ideas that you can utilize to increase your chances for success. I don’t profess to being an expert, but I do know of some. I obviously don’t have the time to go into all the details now, but at my site Market Mentalist you can get more information on Online Futures Trading…Methods and Systems . Besides informative articles you will find, reviews of the best tools, and all you need to know about investing online. There is access to some of the top trading systems available including software, books, newsletters, and Forums. Whether you are an inquisitive novice or a seasoned pro, Market Mentalist offers the online investment resource you just might be seeking.
Solutions Manual to Accompany: Futures, Options, & Swaps: Third Edition
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Solutions Manual to Accompany: Futures, Options, & Swaps: Third Edition
How Does Commodity Futures Day-Trading Work?
What is commodity futures day-trading? Day-trading strategies are unique mechanical methods for entering a liquid commodity market early in the trading day, and exiting some time later in the same day for a profit. Keith Fitschen has developed a family of day-trading strategies for the commodity markets that use the same basic market principle to gain systematic profits. The basic methodology uses multiple timeframe analysis to determine the likely trend for each market early in the trading day. When the likely trend is determined, entry is made in the direction of the trend. Trade exit is made in one of three ways: a stop loss point is hit (and the trade is a loss), a profit target point is hit (and the trade is a windfall profit), or the exit is made at the end of the trading day, usually for a profit.
Keith Fitschen’s commodity futures day-trading methods are used in the most liquid commodities in each group: for the grains, wheat and soybeans can be traded; for the softs, coffee can be traded; for the currencies, the yen and euro-currency can be traded; for the metals, copper, gold, and silver can be traded; for the energies, crude oil, heating oil, and reformulated gas can be traded; for the financials, 10-year notes can be traded;, and for the stock indices, the S&P 500, the Russell 2000, and the German DAX can be traded.
Traditionally, the problem with futures day-trading strategies has been transaction costs: slippage and commission. These costs severely ate into the profit that could be made on a day-trade. But with the advent of deep discount brokers, and electronic trading, commission for a trade can be less than $10, and slippage for a trade can be as low as one or two ticks. This evolution has caused a number of successful trading system designers to promote day-trading strategies. Keith Fitschen’s strategies are unique because they use the same market approach across all the groups, and because the strategy “works” on all the liquid commodities. This type of day-trading leads to an average profit-per-trade of about $150 across all the commodities, and a winning percentage of about 55 percent.
Normally, successful day-trading strategies have been sold to the public for $3,000, or more. This high bar to entry reduces the funds available for trading for a typical trader. Keith Fitschen’s day-trading strategies are offered for a monthly lease fee. This allows a trader to avoid the large upfront expense and spread it over a long period of time, while retaining the right to stop at any time. This means of gaining access to the trading signals is certainly an advantage over the traditional approach.