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How does futures trading work ...? (Read 10274 times)
Ricky Johnson
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How does futures trading work ...?
04/01/11 at 15:48:42
 
I understand how the stock market works, but not how futures trading differs in the buying/selling process.

Can anyone suggest me about this.......??

Thanks a lot .
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Co0olCat
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Re: How does futures trading work ...?
Reply #1 - 04/01/11 at 23:04:44
 
Hi,

It is similar to equities trading, but there are several specific aspects. You will need to look up initial and maintenance margins. All bookings and accounting are centered around it.
Second, since it is a standardized contract to deliver good there is a maturity or expiration time. Since trader does not want to have physical delivery of goods (currencies are exception) with open position and approaching maturity date trader will normally roll to the next maturity. Say, with long position one would sell current position and buy next maturity. The trigger for rolling could be either fixed date or OI or Volume or combination of both.

With all these extra aspects one would ask - why to bother with commodities?

Normally one would find low correlation of commodities to equities, ability to go long and short without restrictions and ability to gear.

Thank you.

Kind regards,
TY
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bethneyfisher
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Re: How does futures trading work ...?
Reply #2 - 05/20/11 at 10:19:25
 
Future trading is the currency exchange business.In this you have to trade on one country currency with other like USD and CAD.You have to keep up to date with the current ratio of two currencies.There is no physical goods to purchase in forex trading.It is simpler than stock market.
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Scott Webster
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Re: How does futures trading work ...?
Reply #3 - 06/10/11 at 13:56:41
 
To me this would be problematic for security reasons.  I wonder whether AI would open up the door for virus AI, that would be a horrible though.
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