Futures Trading: Profitable Endeavor Or Perilous Adventure?

By: Max Day

Futures trading is one area of investing that can be downright intimidating to even seasoned investors. Littered with wonkish jargon and trading strategies that many stock and mutual fund investors may not be familiar with, futures trading can scare off many investors before they even give it a try. All that said, futures trading does have one distinct advantage over trading other asset classes: The potential for big gains that can be accumulated in short time frame. Of course, those big gains depend on your system, strategies and a host of other factors, but we’ll address those factors later on in this piece.

Choices Aplenty In The World Of Futures Trading

Trading futures is similar to options in that futures markets give traders exposure to a broad swath of asset classes and that is another advantage of futures as an asset class. Want to trade commodities such as oil, gold and soybeans? Futures trading has you covered. Want to make a bet on the direction of a particular forex pair? Again, there’s a place for you in futures trading. Futures trading can also give investors exposure to indexes such as the Dow, Nasdaq and S&P 500 along with single-stock futures. And don’t fret if bonds are your cup of tea. There is a futures market for select US Treasuries as well.

As you can see, futures trading is far from limiting in terms of choices. Versatility is important in trading and trading futures can give you the versatility your trading returns may be needing.

Loving Leverage In The World Of Futures

You’ve probably heard the word leverage tossed around a lot by financial commentators and pundits in the wake of the financial calamity that enveloped many markets across the globe during 2008. Leverage became a dirty, four-letter word and the mismanagement of leverage was attributed to the downfall of several large financial institutions.

In the world of futures trading, consider leverage both a pro and a con. For the purposes of introducing you to futures trading, consider leverage as the market’s way of making your dollars go further. Let’s use gold futures to illustrate our point.

In a traditional gold futures contract that trades on the Chicago Board of Trade (CBOT), the investor must purchase 100 troy ounces of gold (the measurement of gold in financial markets) at 10 cents an ounce. And let’s assume that gold is trading for $1,000 per troy ounce. That means in a traditional gold contract, the investors exposure is $100,000! (100 x $1000/oz. = $100,000). You certainly won’t pay $100,000 for the contract, but your dollars are stretched a long way by the use of leverage in the futures world.

Now the flip side of this coin is that while you could possibly make $100,000 on a single trade if all goes right, the chance exists that if you don’t have stop losses in place, you could also lose $100,000, likely far more than your initial capital investment. And losing more than your initial investment is one of the rubs of trading futures.

Don’t Fret: There’s A Cheaper Way To Trade Futures

While that gold example may seem a little daunting, there is a way to get involved with futures trading without risking your entire nest egg. As futures trading has increased in popularity and more investors have wanted to get involved without investing five and six figures, E-mini futures have become more accessible to retail investors.

The advantage of trading E-mini futures, especially for new futures traders, is clear. Let’s use the gold example again. The mini-gold contract traded on the CBOT gives the investor control of just 33.2 troy ounces, making the cost of the contract $3.32 instead of $10 and significantly lowering the investor’s exposure.

Margin requirements are also lower with E-mini contracts. Your broker may require $5,000 in margin for a standard S&P 500 contract. If that’s the case, you can reasonably expect the required margin for the S&P 500 mini will be about $2,500. Advantage: Less risk, less capital required.

There are some drawbacks of trading E-minis though. Obviously, since you’re risking less money, your profit potential is diminished as well. There are also fewer trading options available to E-mini traders. For example, there is no mini contract for lean hogs. The E-mini futures market is also not as liquid as the traditional futures market and this can mean that there may not be a buyer around when you want to exit your position.

Futures Trading: More Pros Than Cons

At the end of the day, futures trading is a great avenue for investors seeking to magnify their returns. That’s not up for debate. Yes, futures trading has its risks, but what asset class doesn’t? Take the time to test your strategies on a demo account and understand how to properly manage leverage. That advice can put you on your way to harnessing the profit power of futures trading.

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Article Source: http://www.articlesbase.com/ – Futures Trading: Profitable Endeavor Or Perilous Adventure?

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Steels Futures May Debut China in Early Q2, Insider

By: tristass

Steels futures may debut China in early Q2, insider

China is expected to announce the timetable for debuting of steels futures after traditional Chinese New Year festival, and it may list the product for trade between April and May, revealed a senior manager with Shanghai Futures Exchange (SHFE) to the China Business Daily.

The source got the information from a recent seminar concerning measures on listing copper options, held by SHFE. He also said deformed bar rather than wires would be launched first.

Gao Zhu, vice general manager of Minmetals Development Co., Ltd. said that SHFE had asked for suggestions from related companies on listing of steels futures, and related examination and approval procedures have come to an end.

But Gao suggested deformed bar and wires should be put on market at the same time.

The early second quarter will embrace construction rush as well as peak demand for building materials, noted Li Shengjun, an official with Shanghai Steel Electronic Exchange Market.

Li said it would take one to two months for SHFE to select delivery storehouse and conduct market promotion. But SHFE is likely to list steels futures before the second quarter in reference to its unexpected listing of gold futures at the beginning of last year, added Li.

Luo Bingsheng, vice chairman of the China Iron and Steel Association (CISA), had estimated in early August last year that steels futures would be listed after 2008 Olympic Games, and not later than the yearend.

However, steels futures haven’t come out yet, mainly due to worsening financial storm since September last year, explained Luo in a recent conference on outlook of China’s(cnmining) steel market.

According to the trade data on China’s largest steels electronic market, Shanghai Steel Exchange Center, its main trading category, hot rolled coils contract for three month delivery, had dived from 5,708 yuan/ton in early July last year to 2,651 yuan/ton in mid November.

Currently, the price picked up to around 3,700 yuan/ton, upon news about steel plants’ production cut and the government’s support for export.

For the steel traders participating in electronic exchange market, they staved off risks brought by price slip last year when other large steel plants suffered great losses.

Now steel and futures industries look forward to steels futures which are more efficient in hedging risk than electronic trading.

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http://www.cnmining.org/news/?id=1026

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Article Source: http://www.articlesbase.com/ – Steels Futures May Debut China in Early Q2, Insider

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BY.-  http://www.MomentumStockPick.com

Beginner traders often fantasize or wonder about how some people are able to achieve tremendous profits by trading stocks just a few hours on a daily or weekly basis.

So going farther than the hype & the bells and whistles that a lot of the called “trading gurus” like to invoke, the real “secrets” of the stock market game are enclosed within the trading set ups and market signals you rely on to decide how to CHOOSE stocks, as well as WHEN to BUY & when to SELL them, or even when to SHORT SELL those that are poised for a profitable fall.

So the clearer your set ups are, the faster you can spot a potentially profitable trading scenario and ACT ON IT reducing your risk.

Complicated technical systems and information overload can make you slow and confuse you right from the start, making you loose money instead of making your profits grow.

In essence, You can be sure that the trading method you employ to approach the stock market and pick stocks can make a big difference in your results as a trader. In order to succeed you will need to FOCUS on a set of simple trading strategies that you can implement without hesitation.

Fortunately some sites on the web do offer more effective and updated day trading methodologies. One of those sites that can show you how to take advantage of certain stocks on positive and negative momentum as well is http://www.MomentumStockPick.com

They focus on momentum stock trading strategies, that are practical and easier to apply than many other technical systems out there.

Stock trading doesn’t have to be complicated as many people perceive. But you do need to follow a well organized set of rules and tactics, that once you master them, you can aspire to replicate profitable trades with consistency.

Popularity: unranked [?]

BY.-  http://www.ChatHotStocks.com

Beginner traders often fantasize or wonder about how some people are able to achieve tremendous profits by trading stocks just a few hours on a daily or weekly basis.

So going farther than the hype & the bells and whistles that a lot of the called “trading gurus” like to invoke, the real “secrets” of the stock market game are enclosed within the trading set ups and market signals you rely on to decide how to CHOOSE stocks, as well as WHEN to BUY & when to SELL them, or even when to SHORT SELL those that are poised for a profitable fall.

So the clearer your set ups are, the faster you can spot a potentially profitable trading scenario and ACT ON IT reducing your risk.

Complicated technical systems and information overload can make you slow and confuse you right from the start, making you loose money instead of making your profits grow.

In essence, You can be sure that the trading method you employ to approach the stock market and pick stocks can make a big difference in your results as a trader. In order to succeed you will need to FOCUS on a set of simple trading strategies that you can implement without hesitation.

Fortunately some sites on the web do offer more effective and updated day trading methodologies. One of those sites that can show you how to take advantage of certain stocks on positive and negative momentum as well is http://www.ChatHotStocks.com  

They focus on momentum stock trading strategies, that are practical and easier to apply than many other technical systems out there.

Stock trading doesn’t have to be complicated as many people perceive. But you do need to follow a well organized set of rules and tactics, that once you master them, you can aspire to replicate profitable trades with consistency.

Popularity: 8% [?]