Futures Trading Blog

techy asked:


i have never done trading before, and i hope i will be able to open a account with either scottrade or sharebuilder

i think if i buy x number of stock of company A, i am long on it, right?

how do i go short on company B, is it called a futures trading or options trading?…can you point me to some website which can explain to me about it?
practical way to do it will be appreciated.

i think it can be done on online websites
some one read my mind (i am not surprised the whole world is not thiniking about the same trade).

i do want to go long EMC anticipating that their price has to increase, else VMW price has to decrease.

keep in mind that i am not going to put a lot of money in this trade, only around $2-4k.

CERRATO

msb asked:


please let me know the following. In future trading suppose if i purchase one lot of any share and i dont square the same on last day of settlement and keep the position open and vice versa. please tell me what will be my position and how it is settled. am i liable for any penalty. Please answer in detail.

VIENS

John Galt asked:


Is the government intervening in the stock markets? Are they propping up the US Dollar? Was the price of gas manipulate before the elections? Are they behind a lot of the mysterious gold selling that happens in NY everytime that gold tries to go up? The Treasury and the Fed are now loaded with former Goldman Sachs employees and Goldman has just had unbelievable record profits. They also went on record changing some futures trading that caused gas prices to plummet just when Paulson went to Treasury. Am I the only one that sees this?
That’s gas as in gasoline not natural gas.

NAGATA

Siddhant Batra asked:


In terms of dollars, how much is the standard brokerage charged for trading 1 future lot of Light Crude Oil (consider its price to be $120)

DADD

nashjohn30 asked:


I was thinking of beginning to trade in the near future and just signed up for some practice trading website to teach me. But I have no idea what exactly what futures, opitions on futures etc. are. Can somebody pls explain that to me.
Also, which ones of those are wise to buy?
That’s why I am currently on a stock trading simulation website. I am just unclear about a lot of stuff on there.

LADUCER

Mike Singh asked:


We assume that you are familiar with the basics of commodities - what they are and the different types of trading. In this article, we will delve in a little more into the futures trading, which is the most common found on many markets these days. Because it is the most common, here we will take a closer look.

A lot of times, commodities like oil are most commonly traded in future trades. For example a barrel of oil can be marked at seventy dollars on a contract for a future trade. The date of expiration will be on this contract, as well as the name of the company it is for. This name must be specific to be of any quality on the contract. This can help differentiate the place the person is expecting the oil to come from, because there are so many places it can come from.

Another very important aspect that should be discussed in intro to commodities part 2 and in regards to future trading is the price. The price itself is very closely related to the company it comes from. That is part of the reason it is so important to state on the contract, where the oil is being purchased. Or whatever the commodity may be at the time. As far as oil, the company affects the price because there are different production processes, refining processes and shipping costs and compositions.

Coming back to the original example in our intro to commodities is the fact that seventy dollars is being asked for this barrel of oil. This means that a small amount of this total must be paid up front. This is called a margin. Lot’s of different things affect this margin, but five percent is usually the average one. The contract will usually state how much oil they want and the five percent is determined from the total.

The main thing to remember in commodities is the date. The date when the product is due, in this case the oil, is very important. There are specialists who actually deal with the oil themselves, but the trader will have to ensure this happens. Otherwise there are lots of losses that can happen from this. However if the spot price, or the price of this oil at any given time, changes the contract must change to fit this information. Once this contract is signed, the trader is obligated. All details are best worked out ahead of time.

As you can see from this article, there is more to future trading in commodities than meets the eye. A lot of future trades in commodities are a lot more complicated. But this brief overview of the main way that commodities are traded should help you out.



LEITH