The futures market is one that offers a great deal of opportunity to traders. If there’s a market out there, it can probably be traded through futures. Although a lot of folks think first of commodities (and indeed many still refer to futures as the commodities market), that is just a portion of what’s available.
Yes, through futures you can trade gold, oil, corn, suger, cotton, pork bellies, and other so-called hard commodities. You can also, however, trade all kinds of fixed income instruments like US T-Bonds, German Bunds, Eurodollars, and Short Sterling. Currencies can be traded via the futures market. So too can stock indices like the S&P 500, the NIKKEI, and the DAX. There are even futures on single stocks, not to mention a whole bunch of other markets you probably never even thought existed.
Futures trading is rather different than trading in stocks, though. In involves considerable leverage and the understanding of the deriviative instrument mechanism. It’s not as complicated as that might make it sound, though.
A while back -Â at the request of a futures broker friend of mine – I put together a guide to explain the ins and outs of futures trading and the futures market.
Click here to get a free introductory guide to help learn futures trading.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
** See John’s full bio.
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