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Guide to the Futures Market



Futures Market


Find out more about the Futures market

A quiet but strengthening revolution has been fomented by the internet in the world’s money markets. What was formerly an exclusive club frequented by the moneyed elite, the corporates and big banks now has a drastically revised door policy.

Thanks to the web, John Doe can enter into the financial fray and secure a slice of the action. So long as Mr., Mrs. or Ms. Doe has an internet connection and the requisite greenbacks, online trading is right here, right now. Money markets, once remote for most people, are now very much a reality even if, ironically, the exchange is ‘remotely’ accessed via the internet.

And it is not just conventional stock exchanges that are being opened up; the biggest embracer of the net has been the futures market. A global market that follows the sun around the planet’s futures exchanges and offers near 24x5 trading is – almost by definition - the natural adopter and spiritual home of web-based trading technology.

On this site, we examine how the internet has enabled admission into the world’s futures exchanges for thousands of investors, both professional and private, in search of new financial products in which to invest. As faith in more conventional stocks decline as a result of stock market under-achievement and stagnation, the futures market is increasingly regarded as the ideal tool with which to hedge and diversify investment portfolios.

But, as you will discover, entering the futures market as an investor is the easy part, getting back out in one piece is another matter. Two words you will see mentioned frequently are “high risk”: as financial exposure goes, futures trading is as about as hair-raising as it gets. Arguably, hang gliding over an active volcano at night just about covers it…

That said, properly prepared and well informed investors can and do make spectacular returns on their money. And we’re talking returns well into double figure territory, the sort of returns your bank account can only dream about.

Putting the futures markets in context, we learn that the modern marketplace traces its lineage back to the Frontier days of the Old West. The site then explores how today’s multi-faceted futures markets operate and how they differ from other financial marketplaces. And from there we get to grips with the essentials of online trading.

Market regulation also gets an airing, with the Commodity Futures Trading Commission (CFTC) having a page dedicated to its role in overseeing the integrity of the futures markets.

We see, too, that there’s more than just vanilla on offer in futures. And we learn the vital characteristics of futures contracts and futures options, and the distinctive terminology that has grown up within the futures market.