Posts Tagged ‘futures’
Commodities Futures Trading Is Profitable, Fun And Fast-Moving
June 18th, 2010
For most people, trading in the ‘market’ means buying and selling stocks and bonds. For some, though, this market is slow moving and unexciting and they prefer something with bigger swings and more profit potential. Commodities futures trading is just such a market and more and more people are becoming involved in this area.
Any type of trading is akin to casino gambling in some respects. And, as in gambling, luck plays a role but there are other factors as well. A successful trader, just like a successful gambler will usually utilize some type of system to better his or her odds.
Stock trading involves buying shares of equity in a listed company. As the company does well and grows its value increases and so should the value of its shares. This is how shareholders make money. They buy at a lower price than they later sell and the difference is their profit. If, however, share value goes down instead of up the investor will lose money (take a loss).
With commodities, traders are buying and selling actual physical products. They may be agricultural (grain, sugar, coffee, O. J., beef, pork, etc.), industrial (gold, silver, copper and platinum) or financial (T-bills, currencies, etc). These commodities all have a fluctuating ’spot price’ which is the cost for buying unit one of that product at this exact point in time. These prices are continually moving up and down.
Commodities can also be traded ‘in the future’. This is done through the use of a futures contract. This is an agreement to buy or sell a certain commodity at a certain price by a certain date in the future (called the delivery date). If you think the price of your chosen commodity will rise between now and the delivery date you want to buy (go long) and then sell the contract back after the price goes up. If you feel the price will be going down you would sell now (go short) and then buy back later at the lower price.
Buying a futures contract puts you in LONG position. If the prices go up you will earn a profit when you sell the contract back. Selling a futures contract puts you in a SHORT position, hoping prices will drop. Then, when you later buy the contract back you will also profit. If prices go against your prediction your trade will close at a loss.
There are definite risks in commodities futures trading but it also holds significant upside potential too. Leverage enables individual traders to control large contracts with relatively small amounts of money but the chance of losing is always present. This market moves fast and is not for the weak of heart. Trade smartly!
Find more information and details about commodities futures trading today! When you learn how to trade futures, you will be able to take advantage of the innumerable opportunities that present themselves to you easily!
categories: commodities futures trading,trading futures,futures,commodities,hedging,stock market
Posted in commodities futures trading | 
Tags: commodities, commodities futures trading, futures, hedging, stock market, trading futures | 
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China to offer stock index futures trading in April.
April 6th, 2010
The bullish response to the news may signal China’s embrace of a full of futures markets.
On March 26th’s breaking news from Shanghai Chinese blue chip shares hit their 8 week highs.
The Yuan is up to 6.8263 against the U.S. dollar, which is higher than it was at Friday’s close at 6.8273.
Shanghai Composite Index moved 64.08 points which is over 2 percent to close at 3,124. January 21st was the previous high.
The Shenzhen Composite Index went up 1% to 1,201.
According to analysts the 3,100 point level is an important psychological benchmark for the market. The benchmark being met with higher trading volume is a definite plus.
To quote Ping An, Securities analyst Li Xianming of Shenzhen, “With the introduction of the stock futures, investors refocused on blue chip shares, as their previous performance has lagged behind the market.”
The big winners include Chinese auto makers, lenders, and brokerages.
China’s three largest financial institutions reported better-than-expected annual earnings.
China Construction Bank Ltd. rose 2.3 percent to 5.71 Yuan Industrial & Commercial Bank of China Ltd. rose 2.5 percent to 5.02 Yuan Bank of China Ltd. rose 3.1 percent to 4.36 Yuan
The two largest brokerages were gainers as well. Haitong Securities Co. gained 2.8 percent to 17.07 Yuan Citic Securities Co. rose 3.5 percent to 28.36 Yuan
The auto makers surge as well. Zhejiang Geely Holding Group signed a deal Sunday to buy Ford Motor Co.’s Volvo Cars. SAIC Motor Co. Volkswagen AG (VGC), the local partner of General Motors Co. at 20.45 Yuan climbed 3.7% Ford Motor Company partner, Chongqing Changan Automobile Co. at 6.97 Yuan increased 1.2%
With the announcement and China’s Blue Chips increasing on it looks like capitalist principals are taking deeper root. It is highly unlikely that the surge in the sectors of auto manufacture, lending, and brokerages is mere coincidence.
James Horne has been a financial analyst for over 10 years. He is CEO of Pure Reason LLC, the home of Shadowtraders. His voice has been heard by hundreds of students learning to trade Futures with Shadowtraders online day trading strategies. Before you purchase any trading software, make sure you attend Shadowtraders Monday Night Webinar, and hosted by Barbara Cohen
Futures Trading Like The Turtles Can Make You Rich!
February 27th, 2010
Financial markets are huge. Daily billions of dollars change hands in these markets when different financial instruments change hands. You can trade stocks. You can trade bonds. Ever heard of the futures market and futures trading? Well, futures are a security just like stocks and bonds. Stocks give you the ownership in part of a company while bonds are issued by governments and companies to borrow money from the investors. Futures are somewhat different than stocks and bonds!
Futures market is a highly regulated market with the CFTC responsible for its regulation. Buyers and sellers don’t come in direct contact with each other. In between is the Central Clearing House that enforces the contract reducing the risk of party default! Futures contract as the name implies is a binding contract between two parties for the delivery of a commodity or an asset or even a financial instrument at some future date between the buyer and seller of that contract.
Futures market is the backbone of the whole sale and retail commodity market ranging from oil, wheat, corn, heating oil, meat, cattle, soybeans and other foodstuff. So you can well imagine the importance of the futures market. Futures market serves the purpose of hedging and speculation.
Futures contracts are by design meant to limit the amount of time and risk exposure experienced by hedgers and speculators. What this means is that all futures contracts are time bound and at some point in the future they expire.
Most brokerage firms require individuals to deposit a fixed amount of at least $5,000 in their brokerage account before they can start trading futures. Now, almost all over the world, futures trading have shifted from open outcry to electronic trading.
Electronic trading has lowered commissions and other transaction costs for trading these contracts plus price discovery is better and there is a more level playing field for all the players in the market. In old times, futures contracts got traded on Futures Exchanges in open outcry pits. It still takes place on the floor of these exchanges but with the advent of electronic trading most of the trading is now shifting to electronic platforms. GLOBEX is the most important platform for trading different futures contracts.
The most popular futures contract that get traded on GLOBEX are S&P 500 stock index futures, NASDAQ 100 futures, Eurodollars, CME E-mini futures, foreign exchange rates, gold futures and crude oil futures. You can also trade options on GLOBEX.
GLOBEX trading overnight tends to be thin and more volatile than during the official trading hours that are from 8:30 AM EST to 4:15 PM EST. If you trade financial news on Bloomberg or CNBC before the stock market opens officially, you will find quotes on S&P 500 futures and other taken from GLOBEX.
These quotes are real time. There are many contracts that you can trade and the possibilities of making money in futures trading are immense. Imagine the prices of crude oil going up again just like what happened in the summer of 2008! Futures trading can be highly profitable but risky as well. Before you dabble in them, you should paper trade these contracts for at least a month just to get a feel of how to do it.
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Posted in commodities mutual funds |
Tags: commodities, commodities mutual funds, currency trading, day trading, etfs, financial planning, forex, futures, investing, mutual funds, real estate, retirement, stock market, Stocks, trading |
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INO TV’s Online Technical Analysis Course
February 15th, 2010
INO TV’s Online Technical Analysis Course
Rating: 5 out of 5 stars
Reviewing: INO TV’s Online Technical Analysis Course
Education in the financial industry is a never ending enterprise. There are an unlimited number of fundamental and technical perspectives that regardless of your education or experience there is constantly something new to discover. INO TV has provided me the online trading education I need to keep me at the top of my game. If you have been in the market for a while no doubt you have been exposed to seminars or other online technical analysis courses you wished to sit in on but couldn’t because they were too expensive or offered at a poor time. In some cases you may be interested in being taught about a specific subject but cannot find an excellent resource. On INO TV you will discover in excess of 1000 hours of technical analysis course education resources in their online library. INO TV is multimedia technical analysis course education available 24 hours a day.
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INO TV is organized into eleven channels of online trading education for traders and investors of different interests and proficiency levels. The Channels are:
Channel 1 – Beginners
Channel 2 – Charts & Analysis
Channel 3 – Currency Trading
Channel 4 – Day Trading
Channel 5 – Futures/Commodities
Channel 6 – Money Management
Channel 7 – Options Trading
Channel 8 – Market Psychology
Channel 9 – Spread Trading
Channel 10 – Stock Trading
Channel 11 – Trading Systems
Whatever your motivation in online trading education its likely INO TV has programs for you. A search tool is also available on INO TV to help traders and investors find the material that interests them the most. If you have a question or a problem their toll free support hotline is accessible to answer your inquiries. One quarterly or annual enrollement entitles you to their entire library and there are no hidden fees. If you want to sample INO TV for at no cost there are spotlighted videos you can watch to give you a persepective of what INO TV has to offer. I would also recommend visiting the INO TV Premium page and browse around the channels to see what’s available. This will give you an idea of the wealth and breadth of technical analysis courses available on INO TV.
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Some of the professionals I enjoy learning from are John Murphy, Martin Pring, Larry Williams, and Mark Cook but there are many others. At last count I saw 138 experts online and new programs are frequently being added.
Bottom Line: If online technical analysis course education is significantto you INO TV is the greatest resource you will find anywhere.
Posted in commodity future trading |
Tags: commodities, currency, forex, futures, investing, money management, Stocks, technical analysis course, trading |
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LEAP Options
November 18th, 2009
One person who made history with options was George Soros who is famously known as the man who broke the Bank of England. Great Britain was finding it difficult to stay within the tight exchange rate band set by the European Monetary Union (EMU).
George Soros is a famous name in the world of investing. He had always believed in contrarian investing. Contrarian investing means doing exactly opposite of what the crowd is doing. George Soros had this intuition that the Bank of England would be forced to devalue British Pound. So he bought call options on German Marks and put options on British Pound. He made a bet of $10 Billion by leveraging all the assets in his hedge fund.
Bank of England had made a number of public statements regarding its intention of staying within the EMU. When George Soros made his bet on the intrinsic weakness of British Pound, other currency speculators followed suit and placed their bets too. This build up an immense selling pressure on the British Pound! Bank of England was brought to its knees as it was unable to sustain the immense selling pressure on the British Pound within a few days of the speculative attack on the British Pound. Bank of England was forced to devalue British Pound in a few short days.
In a matter of a few days, George Soros made a cool $1 Billion profit on his bet. Can you make such a bet? Maybe not but this one example show the immense power options have if used correctly. Options are risky; there should be no doubt about it.
Most people who trade options lose money, plain and simple. Options give you the right to buy or sell an underlying security like stocks, futures, commodities or currencies at a price before a certain date. This price is known as the Strike Price. This date is known as the Expiry Date. However, in European Style options you can only buy or sell on the expiry date not before that.
You need to learn the Options Greeks. Time factor is very important when valuing an option. Further out the options contract is from expiration, you will have to pay a higher premium. As the options contract approaches the expiration date and if it is out of money, it loses its value very fast.
LEAP options are basically long term options. Leap options can help you profit over the long haul. You can use LEAP options in options strategies like the covered calls, straddles, spreads and so on. LEAP stands for long term equity anticipation. It basically means that the option is much like the regular option except that the timeframe to expire is greater than 1 year.
LEAP options are risky because the option writer usually demands a hefty premium for taking on the long term risk. However, LEAP options can be incredibly profitable if used correctly. The buyer of the LEAP options has the right to exercise the option prior to expiration should the price of the underlying stock move in the money.
LEAP options can be a great trading vehicle for swing traders as they mitigate some of the time decay that is inherent in short term options. See, closer the out of money option is to expiration, faster its value drops. What this means is that the buyer of the options loses the premium that was paid for getting the right to buy or sell the underlying security.
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Posted in commodity option trading |
Tags: business, commodities, commodity option trading, day trading, finance, forex, futures, investing, market news, mutual funds, options, real estate, Stocks, trading, wealth building |
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Autotrading Exposed
November 16th, 2009
Many hedge funds and other entities that manage money through forex trading use some form of autotrading in their daily activities. Autotrading is common in the currency trading.
Big institutions have the resources to finance their inhouse development teams. Big institutions always had proprietary autotrading systems developed by their inhouse programming teams. These autotrading programs also known as Expert Advisors or Forex Robots were expensive costing like thousands of dollars and only wealthy individuals or big institutions like hedge funds could afford them. These autotrading systems were proprietary in nature and were not available to the general public.
However, the recent developments in computer programming have changed the field. Many private individual traders have also begun to adopt autotrading to execute their thoroughly backtested and highly optimized forex trading strategies. The recent advancement in computer programming has made it possible for professional forex traders to team up with a software expert to develop their own autotrading systems.
The price of these Expert Advisors has also come down to around a few hundreds that can be easily purchased by ordinary investors like you and me. Metatrader platform makes it real easy to program such type of Expert Advisors.
Recent advancements in computer programming has led to the development of trading platforms that allow an API ( Application Programming Interface) which connects the trader’s system to the dealer’s trade execution structure through the trading platform. So what is autotrading? You must have heard or read a lot about the benefits or advantages of autotrading.
APIs requires programming skills on the part of either the trader or a programmer hired by the trader. But once all of the trading rules and criteria are determined by the trader, programming an API can be relatively straight forward for anyone with programming experience. After the specific trading rules and criteria are determined, the trading strategy is backtested with positive results.
The development of an autotrading system depends more on your trading skills as compared to your programming skills. When this occurs not only trades entered when predetermined technical criteria is met but trade exits in the form of stop loss and take profit rules can also be programmed into the API. Autotrading is almost as simple as flipping a switch to begin the trading process.
However, before an autotrading system is put on live trading, it is thoroughly backtested and forward tested to make sure the likely success of the autotrading system. This creates an entirely self contained autotrading system. So autotrading can actually execute real trades on current real time market prices. When a predetermined signal emerges, the software actually places a trade automatically.
In fact, autotrading is perhaps the best way to achieve it if the trader has optimized and perfected this type of black and white trading strategy that runs devoid of human judgment. Any nondiscretionary technical trading strategy that has clear cut, unambiguous rules is a good candidate for autotrading. Autotrading effectively eliminates all human biases, errors and emotions in the trading process.
Every month you will come across a new forex autotrading system. The best two forex autotrading systems are FAPT and Ivy Bot. There are a number of successful autotrading systems now available in the market for the ordinary retail investors.
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Posted in commodity option trading |
Tags: business, commodities, commodity option trading, day trading, finance, forex, futures, investing, market news, mutual funds, options, real estate, Stocks, trading, wealth building |
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