There are major differences between trading stocks and trading
the future. While stories of fortunes are made or lost overnight on the futures markets largely untrue, the futures trader, if using a sound trading system, you can usually earn more money in the futures market and make it much faster. However, if the trading system is not sound the trader can have greater losses.
This is because futures contracts are highly affected. margins
(deposit required) on futures contracts are much less than for stocks, as low as 3% on some futures contracts compared with up to 50% for stocks. As well, futures investors are not charged interest on the difference between the margin and the full contract value.
margins for futures contracts act more like a bond or good faith deposit, while the margin for stocks is more than a loan. Although the margin on futures contracts is very small, she rides the full value of the initial contract as the contract rises or falls, which are affected earlier.
Commission charged futures brokerages are normally much less than brokerage commissions for other investments.
futures markets use the open outcry (auction type) method
trade insurance is very open, honest and efficient markets. Plus, it's much harder to trade on inside information as to the many variables affecting the markets. Also, futures markets are highly liquid. Transactions can be completed quickly, which reduces the risk of adverse market moves
If you own shares you own a business. This allows you to share in company profits, and losses through dividends, and increases or decreases in stock value. It also gives you certain rights to vote with the company. However, the company may go bankrupt, leaving you holding worthless stock.
When you buy and sell futures are just concluding a contract, not really own anything. What you have is a contract for the purchase of goods or financial instrument (wheat or Treasury Bonds for example) at a specified price on a certain date in the future.
person on the other side of the transaction agreed to sell a commodity or financial instrument at that specified price by a certain date. If you sell a futures contract before that date, you shift your position, and any gain or loss on the trade.
stock you bought 3 years ago is the same stocks you can buy today. Futures, on the other hand, are very limited life. They are traded in a regular series of contract months, called the delivery month.
futures contract expiration date, after which no further trading for that month may be održati.Ugovor September corn are traded last year's September corn contract you are trading this year. In fact in September of last year's corn contract no longer exists.
Many futures contract months of the same commodity trade simultaneously on the market, sometimes even years in the future. The current contract is called the front month and the other agreements referred to previous months. They called back months even for future months.
For example, corn trades for the month of January, March, May, July, September, November and December. Suppose today's date is 4 August 2000. The current contract month for corn will be in September 2000 and is called the front mjesec.Mjeseca November and December 2000, January 2001, March 2001, May 2001 July 2001 they returned months, although they are in the future, even flow in the next year .
(This May sound confusing, but not really ...)
All of these months are traded at the same time, although the majority of trading activity takes place in the months ahead.
When the current month contract expires next month becomes the front month and so on.
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