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Futures Trading Article
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What You Need To Know about Trading Futures And Options
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Futures trading is a risky business. It is a financial gamble. And, like any gamble, you will never know when you will win and when you will lose. The key is simply to play the game based on the cards you are dealt with, what you know about the market so far and hope for the best.
Many traders are lured into futures trading because of the great rewards it can potentially bring. However, you must keep in mind the rule of opposites, in that with great rewards, also come great downfalls. Futures trading, because you're gambling with something that is yet to happen, is nowhere near accurate.
This can also happen when you're dealing with options, because, the value of underlying options are basically placed against futures contracts. When you acquire options, more likely than not you will get them at a discounted rate based on the price of the product at the time they were issued.
Many find stock options trading attractive because it allows people to acquire stock at a discounted price. With this procedure, holders of stock options hope that the shares' value will increase within the period of time given so that they could sell at a higher price and generate a profit.
Options may be exercised at a given time in the future and at the rate at which they were issued, but the holders stand to gain or lose depending on the value of the options at the given future date. Thus, when you really look into the nature of futures and options, they are very similar and related.
Trading Options and Futures: Some Tips
Trading options and futures requires research on your part
Futures trading involves 4 investment categories: namely, speculation, growth, inflation hedges and income. Without adequate knowledge of these four, you won't be able to move freely in the trading market and might even cause yourself to lose.
Do not simply rely on somebody else to do the research and understanding for you. Being able to make intelligent decisions, no matter how inaccurate, will sometimes make the difference between a win and a loss.
You should invest no more than 10% of your net on futures.
Futures trading should not be your first foray into financial trading because it involves a considerable investment. You should only do it when you're confident that you have enough knowledge and that your other investments are working out for you.
The market is unpredictable.
No matter what experts say or predict will happen to the market months or years from now, nobody will be able to make perfect forecasts. Therefore, if you're planning to invest your hard-earned money into financial trades, do not put all your eggs in one basket.
While it is possible that you will make a fortune out of this risk, it is also likely that it will be the one that will send you to the poorhouse. Tread carefully.
Futures Trading News
Investors can soon make bets on movie box office - Los Angeles Times
 Globe and Mail | Investors can soon make bets on movie box office Los Angeles Times Both firms say they expect to win regulatory approval within the next couple of months from the Commodity Futures Trading Commission, which oversees futures ... A Place to Bet Real Money on Movies Film futures contract to allow box office bets Does Box-Office Futures Trading Equal Flop Insurance? |
CFTC to study high-frequency futures trading - Financial Times
 MiamiHerald.com | CFTC to study high-frequency futures trading Financial Times Gary Gensler, chairman of the Commodity Futures Trading Commission, said the agency started looking into the issue last year and would come up with ... Gensler Asks If 'Nudge' From Congress Is Needed in Swaps Market CME CEO to CFTC chief: no OTC trading mandates Gensler:CFTC Working On Proposed Rule On Co-Location |
Tsy, Eurodollars, Fed Funds Futures 'On The Table' For NYSE Liffe US - Wall Street Journal
 New York Daily News | Tsy, Eurodollars, Fed Funds Futures 'On The Table' For NYSE Liffe US Wall Street Journal ELX Futures LP, a consortium-backed startup exchange that launched last July, is also targeting the US Treasury futures market. Trading activity in interest ... DRW Ventures challenges CME Group's dominance Appetite for reform fading: NYSE Euronext CEO NYSE Euronext Announces Trading Volumes for February 2010 |
OIL FUTURES: Crude Unchanged; Markets Mull China Inflation - Wall Street Journal
 MiamiHerald.com | OIL FUTURES: Crude Unchanged; Markets Mull China Inflation Wall Street Journal This sparked fears that China--the biggest driver of global oil demand growth--could limit its appetite for oil, which kept oil prices trading in negative ... NYMEX-Crude dips on China worry, eyes dollar moves OPEC, EIA lift demand views, but US data still seen bearish Crude Oil Rises to Eight-Week High on Increased Investments |
CBOE Files to Sell as Much as $300 Million in IPO - Bloomberg
 Wall Street Pit (blog) | CBOE Files to Sell as Much as $300 Million in IPO Bloomberg The Chicago Board of Trade was acquired by the Chicago Mercantile Exchange in 2007, creating CME Group Inc., the world's largest futures exchange. ... CBOE Holdings Files IPO Of $300 Mln - Update CBOE to take first step towards IPO |