Article

What are the different markets in which futures trading can be done ?

Written by Epic Research Indore

Topic: InvestingPublished December 28, 2016
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Futures are advanced investment tools and investors does not enter into this without having a proper knowledge about it. To succeed in futures by earning good returns having good market knowledge is must. There are financial advisers as well who can suggest stock futures tips , using which desired returns could be earned. By future contract it is meant that two parties a buyer and a seller agrees to buy/sell an asset at a pre decided price and time which is usually less then one year. Traders find different terms and trading strategies of futures very confusing. High returns can be earned by trading in futures , but having a good understanding of working of different markets is required. Hedgers and speculators meet here to predict the price fluctuations on different commodity, currency and index. Like any other market , future market also has its own risk. Following are the different futures market where traders can trade: 1)Commodities Commodity market has agricultural commodities, oils and gas as its major component. Price fluctuations in commodity market is primarily governed by demand and supply.Various commodities acts as raw materials for producers of some goods. And to hedge against future price risk of those commodities, traders enter into future contracts of commodities. This can be done in various ways . A trader can use straddle to enter in this contract by holding same number of calls and puts which are having same expiration date and strike price. Also a general strategy of buying a call option if you believe price will appreciate in future or buying a put option if you believe price will depreciate in future can be used. rn2)Currencies As in commodities, a trader has to predict whether the price of a commodity will fall or rise , similarly in currencies he has to predict the value of currency will appreciate or depreciate.A very common trading strategy which is used in currencies futures is scalping.Traders try to make profit within short time frame here. Scalping is a strict disciplined trading strategy where a trader has to earn short-term profits continuously and avoid earning losses. 3)Indexes Future trading can be done on indexes as well. Traders generally study the past performance on index and based on that they design future contracts on Indexes . Timing strategy is also used . Traders study different trading cycles to conclude the best way to trade in index futures. rnTrading is stock futures is both risky and rewarding. A beginner can find various different markets and ways to enter into this market. But yes without having a proper knowledge about futures trading a trader must not enter here. Financial Advisory Services providers can help you in learning efficient ways of futures trading .

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Futures are advanced investment tools and investors does not enter into this without having a proper knowledge about it.

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