|
Written by Aaron Adam
|
|
Although they're traded in a similar fashion to stocks, the truth is that a futures contract is an entirely different animal. In fact there are a variety of key differences between futures and various other financial instruments such as stock and options. It's important for investors in the futures markets to know and understand these differences, so they'll have a better grasp of what they're buying and selling. |
|
Read more...
|
|
|
Written by Aaron Adam
|
|
Futures contracts are becoming increasingly popular among investors because they can allow big profits to be made with minimal investment capital. A key factor in this potential for high reward for minimal capital is something called margin buying.
Margin buying is essentially the purchase of securities with money borrowed from a broker. You put up a certain amount of cash and the broker gives you more money. Other securities owned by the buyer are used as collateral. Margin buying has the effect of allowing investors to make big futures purchases with a small amount of money, |
|
Read more...
|
|
|
Written by Aaron Adam
|
|
Investors who are trading futures contracts should be fully aware of the various risks these transactions carry. This is particularly important because many novice investors get tripped up by misunderstandings concerning margin. If you're trading futures, it is possible to lose not only the initial margin amount, but also the full amount you've deposited in your margin account. |
|
Read more...
|
|
|
Written by Aaron Adam
|
|
The futures market is an increasingly popular market for investors because of their high risk, high reward excitement and the expanding availability of the market thanks to electronic trading. Investors in futures contracts are generally placed in one of two groups: hedgers and speculators. |
|
Read more...
|
|
|
How to Open A Long Position |
|
Written by Aaron Adam
|
|
If you believe a commodity or financial instrument's value is going to increase, you can make a profit on the eventual rise of this underlying asset by adopting a long position in the futures market. In simple terms, a long position is a bet that the value of the underlying asset being traded will increase. Like any other investment, adopting a long position in the futures market involve some risk. But with experience and good research, you can stack the odds more highly in your favor. |
|
Read more...
|
|
|
|