Online Stock Trading

What Tools & Knowledge Do Futures Trading Need?

Futures, options, forex, stock and derivative traders who use technical analysis or fundamental information on the markets for increased returns and profits in trading. Futures, options, forex, stock and derivative traders are educated on using technical analysis tools such as moving averages, stochastics, trendlines, price data, Elliott wave, and other technical studies. Futures, options, forex, stock and derivative traders also are provided fundamental recaps of financial and commodities markets, which includes expert analysis, supply/demand data and expert and government forecasts. Markets includes stock indexes, interest rates, foreign exchange and commodities such as energies, metals, grains, livestock and softs.

What's the difference between stocks and futures?

A: Trading stock involves bringing people with extra capital together with those who need capital to develop a business. They facilitate the transfer of ownership of the corporations. Property rights change hands. Whereas trading futures brings people together to transfer the price risk associated with the ownership of some commodity, like wheat, or a service, like an interest rate. No property rights to a physical commodity change hands at the time the futures contract is entered into. In many ways, this makes trading futures vs. stocks much simpler in terms of taxes, execution, short selling and analysis. Source: Starting Out in Futures Trading, Mark J. Powers; Probus Publishing Co., 1993.

Futures - What are Futures?

So just what are "Futures?"

Futures are:
An agreement to buy or sell a set amount of a commodity or security in a designated future month at a price agreed upon today by the buyer and seller. A futures contract differs from an option because an option is the right to buy or sell, whereas a futures contract is the promise to actually make a transaction. A future is part of a class of securities called derivatives, so named because such securities derive their value from the worth of an underlying investment.

Our advice - don't start out trading in Futures. Get a solid understanding of the stock market before moving in to Futures - and do your research!!!