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Upon extensive research about Futures Trading's strategies there does not seem to be any definitive answer as to when this practice began. There is a large amount of information available about Futures Trading's strategies but no clear concept of how long this has been used.
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∙ 10y ago
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Are futures contracts long term contracts?
They can be. If you look at the futures pricing, you'll see futures contracts that settle in 2013--and futures contracts that settle next month.
Explain the difference between a call option and a long position in a futures contract?
The only difference between a long call option and a long futures position is the derivative itself--one of them is an option, the other is a futures contract.
How do you trade in nifty futures?
First of all, you need to have a futures trading account with your local futures broker. After that is in place, it is a simple matter of going long on the nifty futures when you think the market is going to go up and going short when you think the market is going to go down.
How is zero sum maintained in futures trading when speculators outnumber hedgers?
Zero sum is maintained by the fact that there is always two parties in a futures transaction; the Long and the Short. One wins at the expense of the other. It does matter how many speculators or hedgers there are because each individual futures contract is entered into by two parties.
What is a reliable company involved in futures trading?
In Australia the most reputitable company involved in futures trading would be The Macquarie Bank. It has been a consistent player in the trading market of Australia for a long period of time. Macquarie bank being the largest clearer on the ASX, and is a member on a number of international global exchange. Macquarie bank has proven to be a excellent place to invest.
What is long and short at the same time?
its medium
How does one trade futures online?
Generally, you will take the long side of a single stock futures when are your outlook on the stock is bullish and take the short side when your outlook is bearish.
What are Dow Jones futures?
The Chicago Board of Trade's DJIA Futures contract is a futures contract on the entire Dow Jones Industrial Average. This one's REALLY weird, so hang on:The value of this contract is 10 times the Dow Jones Industrial Average. If the Dow is 10,000 today, the price of a futures contract on it is $100,000.Next, on the date of settlement cash is delivered, not 300 shares of stock.Third, this futures contract requires daily settlement payments, and this is why the DJIA futures contract is so weird. You and I are counterparties to one of these things. You're the futures buyer, or the long; I am the futures seller, or the short. The Dow was at 9000 when we did the deal, so you paid me $90,000, which went into my brokerage account. If the Dow closes tomorrow at 9010, I have to pay you $100--ten times the delta in the Dow. Similarly, if the Dow closes tomorrow at 8990, you pay me $100.
Options and futures are zero sum game?
Each futures or options contract requires two counterparties to the trade: long and short. In other words, for futures contracts to materialise, there needs to be one buyer matched with one seller at a specific point in time, dealing in certain asset, at a certain delivery point. For options, a writer has to sell their contract onto a holder, who purchases the option. Again, the deliverable is specified and strike price established. Futures and options contracts are dealt daily on exchanges, such as CME or Euronext. These exchanges provide rules for trading the derivatives, such as options and futures. Moreover, these exchanges act as central counterparty to the trade between buyer and seller, long and short in futures or writers and holders for options. Futures contracts are marked-to-market daily, so that profit and loss on each position is calculated and added or removed from the trader's account. Therefore, one point gain on long position will equal one point loss on equivalent short position. The short pays long the daily difference in contract price changes via central counterparty. Reverse applies when prices go down, then short gains money and long loses it, but the difference will always be zero. So zero-sum game is: +1 gain on long equals -1 loss short which = 0
What is the difference between a forward contracts futures contracts and options?
Forwards and futures are essentially the same thing: a commitment to buy/sell at a certain date for a certain price. The difference is in futures contracts you're also committed to sell a certain quantity, whereas in a forward you're not.An options contract gives you the option, but not the obligation, to buy or sell. This is great if you're working with stocks. If you have a futures contract to buy 500 shares of Coca-Cola for $10 per share on January 15 and Coke closed at $8 on January 15, you just lost a thousand dollars. If you were long on a put with the same spread between strike and stock prices, you made $1000.Forwards and futures have a purpose in life--IF you're dealing commodities with the intention to use them. You make frozen pies. You know you need ten tons each of wheat, sugar and apples. If you have a futures contract for October delivery on all of those commodities, you know what your pies' materials value is going to be, hence you can publish a good price for your pies. But futures speculators--investors who buy futures with the intent of selling the product after delivery, or the contract to a producer (there is a secondary market in futures)--have a long and proud history of losing their asses on these, so I recommend against them as an investment vehicle.
What is Open interest in future trade?
Open interest indicates the number of open contracts in futures trading. An open futures contract consists of a long and a short trading a single contract. Some exchanges treat that as 1 open interest while some exchanges treat that as 2 since two parties are involved in the trade. In general, the more open interest a futures contract has, the more liquid it is.
What is the relationships among objectives strategies and policies?
Long-term objectives and strategies are products of strategy formulation. Short-term (annual) objectives and policies are products of strategy implementation. Firms should translate long-term objectives into annual objectives. Similarly, strategies should be supported with clear policies.
