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The advantages of futures trading, according to "Online Futures Trading - Advantages and Disadvantage" by Tim Wreford:
Leverage. Futures operate on margin, meaning that to take a position only a fraction of the total value needs to be available in cash in the trading account.
Commission Costs. Electronically traded futures contracts require no human intervention to match buys and sells unlike a traditional futures pit. This means that commission costs can be cut dramatically, leading to significant savings for the frequent trader.
Liquidity. The involvement of speculators means that futures contracts are reasonably liquid. However, how liquid depends on the actual contract being traded. Electronically traded contracts, such as the e-mini's tend to be the most liquid whereas the pit traded commodities like corn, Orange Juice etc are not so readily available to the retail trader and are more expensive to trade in terms of commission and spread.
Ability to go short. Futures contracts can be sold as easily as they are bought enabling a trader to profit from falling markets as well as rising ones. There is no 'uptick rule' for example like there is with stocks.
No 'Time Decay'. Options suffer from time decay because the closer they come to expiry the less time there is for the option to come into the money. Futures contracts do not suffer from this as they are not anticipating a particular strike price at expiry.
Automated trading. Electronic futures brokers offer the facility to programmers to interface directly with their trading software. This means that custom written trading software can automatically trade a strategy without any human intervention at all. A system can make buy/sell signals which are automatically routed to the exchange along with any stops and targets.
Almost instant fills. With electronically traded futures there is no need to call up a broker and wait for a fill from the trading floor. Orders are instantly placed on the electronic order book and filled as soon as a match is found - for liquid contracts such as the emini S&P500 this will be within a second.
Level playing field. With traditional pit traded futures the professional in the pit has a major advantage over the retail trader in terms of speed of execution and costs. Electronic futures trading offers all participants exactly the same advantages.
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What can one do on Futures online trading?
There are many Future Online Trading. At Trade Station, people can get award-winning futures trading software and low trade commission. Optimus Future offer commodity trading as well as commodity and discount online broker and investing services.
Where can you find commodity trading courses?
I Really Trade and IFF Trading are both websites that offer online commodity trading courses. Trading Academy and Learn Futures also provide such courses.
What has the author Sally Clubley written?
Sally Clubley has written: 'Trading in Oil Futures and Options' 'Trading in oil futures' -- subject(s): Commodity exchanges, Futures market, Petroleum industry and trade, Speculation
Where can one find information about trading futures online?
You can find information about trading futures online from various sources such as brokerage firms, financial news websites, educational websites, and official exchanges like the CME Group. These sources provide information on how futures contracts work, market analysis, trading strategies, and regulatory guidelines for trading futures.
Where can one take part in commodity trading?
Trading commodities is done with a commodity broker. Check with the firm to be sure if they can trade commodities. Commodities brokers are required to be licensed by the National Futures Association.
How much is gold trading for on the stock market?
A commodity such as gold does not trade on the "stock" market. Gold and other commodities trade on the futures market. Currently it is trading as much as $1798.40.
Where can one find more information on Dija futures?
Dija futures is a type of trading stocks. To trade Dija you need an account with a registered commodity futures broker who can provide training on how to use the system.
Where is the commission in forex trading?
Investors who trade stocks, futures or options typically use a broker, who acts as an agent in the transaction.
What are the requirements for trading under commodity?
The Commodity Exchange Act make it illegal to trade a contract for the purchase or sale of a commodity for future delivery a futures contract unless the contract is executed on a federally designated exchange .
What has the author Julius Bernard Baer written?
Julius Bernard Baer has written: 'Commodity exchanges and futures trading' -- subject(s): Commodity exchanges 'Commodity exchanges' -- subject(s): Commercial products, Commodity exchanges, Produce trade
What level of commission is possible in commodity future trading?
Commissions are paid to the broker whenever you complete a commodities trade in futures trading. Some companies do not charge commission, but take a couple ticks off the price of the commodity when you buy or sell.
What has the author George Angell written?
George Angell has written: 'Winning in the futures market' -- subject(s): Futures market, Financial futures, Commodity exchanges 'Small stocks for big profits' -- subject(s): Stocks, Small capitalization stocks, Finance.,, Small business 'Winning in the futures market : a money-making guide to trading hedging and speculating' -- subject(s): Futures market, Financial futures, Speculation, Commodity exchanges 'Winning in the commodities market' -- subject(s): Commodity futures 'Real-time proven commodity spreads' -- subject(s): Commodity exchanges, Charts, diagrams 'Agricultural options' -- subject(s): Options (Finance), Cattle trade, Grain trade
