Here in the U.S. it began more than 150 years ago at the Chicago Board of Trade with the first agricultural futures contract. In 1982 options on futures was introduced, and in the 1990′s exchanges introduced electronic trading. Futures trading is now a 24 hour, seven days a week enterprise, and undoubtedly the primary reason you’re researching it. Like all financial instruments, the futures market is highly regulated, but not by the SEC. From crops such as corn or wheat, to oil, currency, and gold, commodities get traded on the futures market. Rice was undoubtedly the very first commodity traded at the original market of the Chinese.
Commercial hedgers are corporations and sometime individuals, that are intended to ensure the stability of a particular commodity by adopting a position in the commodities market. Take peas for example, and the hedger, a food processor who cans them. If pea prices go up the hedger ends up having to pay the farmer or pea dealer more. Because it is essentially a cash commodity, to protect himself against higher pea prices, the processor can ‘hedge’ his risk exposure by buying enough pea futures contracts to cover the number of peas he expects to buy. Since cash and futures prices do tend to move forward in tandem, the futures position will profit if the price of peas rise enough to offset cash pea losses.
Speculators are the second main group of futures players. These participants include independent floor traders and investors. A speculator is a person, or more likely an institution, that purchases or sells the commodities based on factors other than simply analysis. Whereas investors will focus, by and large, on detailed analysis.
Binary options hourly futures trading systems
Since most individual traders are speculators, here shows a list of some of the strengths and weaknesses of the futures market over other investment possibilities.
The possibility exist that a person can make more money faster in the futures market, because the rate of prices tend to change quicker than stocks. Conversely, bad judgment can cause one to suffer greater losses than traditional investments.
Most commodity markets are very broad and liquid. Transactions can be completed quickly, lowering the likelihood of adverse market moves between the time of the decision to trade and the industry’s execution.
Futures are highly leveraged investments. The trader only puts up about 15-20% as a margin, yet still being able to ride the total amount of the contract. Unlike stocks where at least 50 percent of its value needs to be put up. The investor pays interest on the discrepancy between the margin and the full contract value.
Let us imagine that you have some knowledge or you would not be researching the market. Any training you receive should be for technical analysis, or you’re just wasting time and money. As far as software platforms, the following suggestions I strongly feel are needed for any software to be useful.