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What exactly is a future? What different kinds of different futures are there? How does one get involved with them? Are they worth while?
Questions about futures
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Swole_2112 said:
Here's a formal explaination http://www.cme.com/edu/
but basically it's a contract/trading instrument that is "based" on the future expection of what ever it's representing. So I trade S&P 500 emini futures and it's supposed to be based on the future expection of where the S&P 500 will be . This may sound strange (how can we know the future) but think of it as a discounting mechnism that constantly reprices future events based on say future earnings , weather conditions or basic supply/demand. It is very worth it to me b/c when I traded stocks the tax rate was higher that futures and futures offered much more leverage than even options. One advantage over options is they are priced better with tighter spreads and higher liquidity. They are also dangerous because of the higher leverage and I've blown out a trading account in 3 days in 2002. Some contracts do trend well, such as oil and cotton futures, but some are pure guerilla warfare like S&P eminis or the big contract traded in the pit (like in the movie trading places) . All you need is a broker such as http://www.globalfutures.com/webforms/300cme.asp?refid=Elite Trader . As for worth it? To me yes to many others I know no.
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A good example of the emini futures contract for the S&P 500 today May 1 and some of the tools pros use to trade futures.
http://www.ttrader.com/mycharts/display.php?p=39647&u=theplumber&a=theplumber\'s charts&id=889
http://www.ttrader.com/mycharts/display.php?p=39647&u=theplumber&a=theplumber\'s charts&id=889
An interesting read from a book, scrool down and read it all before even thinking about trading futures
http://www.smr.com/ift.htm
http://www.smr.com/ift.htm
Creepusmaximus
New member
Stay away from futures, it's a good way to lose mass amounts of cash. For that matter options too. You really need to know what your doing. The shorter the time period and the more leverage your using equals greater risk. If you don't know what your doing, you might as well go to a casino.
The best of the best in futures is RenTec and James Simons.
http://en.wikipedia.org/wiki/Renaissance_Technologies
http://www.turtletrader.com/trader-simons.html
A pure mathematics background , the best of the best. Large amounts of money can be both made and lost. If anyone wants to see more more about what type of analysis is done to make trades (not the Soros type of information flow only) I can show more but I'd like some feedback as to who is interested and what areas (what specific contracts) people would like to trade.
http://en.wikipedia.org/wiki/Renaissance_Technologies
http://www.turtletrader.com/trader-simons.html
A pure mathematics background , the best of the best. Large amounts of money can be both made and lost. If anyone wants to see more more about what type of analysis is done to make trades (not the Soros type of information flow only) I can show more but I'd like some feedback as to who is interested and what areas (what specific contracts) people would like to trade.
bran987
New member
as a way of speculating to make money, futures and options are no different really than speculating outright on a stock or anything else, apart from the fact that they allow you to use greater leverage, magnifying any gains or losses you incur.
as a way of hedging risk in your current positions, they are useful as "insurance" as in you pay a little now to hedge your risk of losing a lot later on should the position tank.
covered calls are the most popular option written for the average joe, allowing you to collect premiums on a stock you already own in exchange for agreeing to sell the stock at a certain price in the future, should it rise to that level. a lot to learn about options, I might actually take a whole class on them next year but I haven't decided if it's worthwhile for me or not.
as a way of hedging risk in your current positions, they are useful as "insurance" as in you pay a little now to hedge your risk of losing a lot later on should the position tank.
covered calls are the most popular option written for the average joe, allowing you to collect premiums on a stock you already own in exchange for agreeing to sell the stock at a certain price in the future, should it rise to that level. a lot to learn about options, I might actually take a whole class on them next year but I haven't decided if it's worthwhile for me or not.
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