Tag Archives: Trading

General Business

Some Basics of Futures Trading

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But the difference lies in what you are buying and what you are selling. In futures trade, one actually enters in a contract to buy or sell certain assets in future but price is decided at the time of making contract. Whereas, when we buy or sell stock, we are actually buying or selling the stock now. Let us understand the concept of futures trade in detail:

Futures Trading: It is a type of financial contracts in which two parties enter into agreement to buy or sell particular assets for future delivery at currently decided rate. It is basically buying of things of which seller has not produced at particular rate. It is basically hedging of risk and speculating rather than actual exchange of physical goods. Therefore, futures dealing is not only ruled by the buyers and seller rather by speculator as well. This practice of trading is extremely risky and liquid. At one stage one can make revenue from small investment and at other stage one can be looser. The process of this trading is very complex and difficult to be understood by ordinary people.

Assets of trading: The asset of trading can be both physical commodities and financial assets. Physical commodities include agricultural commodities, livestock& meat, energy, precious metals, rare metals, industrial metals, minerals, environmental commodities, etc. Financial assets sold in futures trade can be currencies, securities and intangible assets.

Types of futures traders: There are two major types of futures traders: Hedgers and Speculators. Hedgers are manufacturer of commodity and set deal to protect them from frequent change of prices. Besides physical commodities, banks, insurance companies, mutual funds, pension funds, etc also fall in the hedger’s frame of trading. Speculators are autonomous traders and investors who enter into agreement on their strong prediction to generate revenue from future contracts. Some facts about futures trading are •Market movements are too complex to predict precisely. Prices and trend varies marginally and frequently. These are the basics of Futures trading. One can easily get learn the basic facts about this trend of trading easily. People interested in this trading can invest money. One can also keep broker who have complete hold in the field. The risk of loss exists in futures trading. Past performance is not indicative of future results.

General Business

Futures Trading – New Practice of Trading

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The contracts are dealt on future exchange. Underlying commodities are sold in future at a fixed price. The trend of futures trade is gaining popularities day by day. However, this trend of trading usually comes under fire by the critics. They believe that this practice of dealing interferes with the normal cause and effect of supply and demand. However, in this competitive market economy, many buyers and sellers are engaged in trading openly.

Futures trading is of two types: commodity futures contract and financial futures contract. Commodity futures contract deals with physical commodities like rice, sugar, wheat, oil, natural gas, gold silver, diamond, etc. Financial futures contract is about paper investment. It deals with treasury notes, mutual fund, bond, etc. So, people should invest in right contract which can liquidate to give maximum revenue. Large numbers of people invest in both the contracts. However, financial contract futures are considers more risky as compared to that of commodity future contract.

Trader should go long and liquidate the contract when the chance of revenue is max. ‘Going long’ means buying a contract. When a contract is sold, it is called as ‘going short’. ‘Going long’ is more conventional than going short. Those who are involved in futures trading is called as future traders. They are in two groups: hedgers and speculators. Hedgers are seller of the in the economic market who are selling sell underlying assets seeing the risk due to price change. Futures trading is highly leveraged.

The risk of loss exists in futures trading. Past performance is not indicative of future results. The trading platforms also provide REAL-TIME quotes on all the markets traded.

Forex Trading Articles

The Nuances of CFDs Trading

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As a trader, you will be on a constant look out for ways to improve the leverage that your trades have. You will want more than just options and warrants. In such cases, “contracts for difference” or CFDs could be what you are looking for. Trading in CFDs is a lucrative prospect for experienced traders who want to make the most of their long as well as short term positions. CFDs offer you a range of gearing, short selling as well as direct trading based on the prices of products. You do not have to wait for execution. And the best part of it all is that there are several international markets for you to explore.

A CFD can be understood as a derivative. This means that it derives its value based on some other security. A CFD is a contract that exists between the trader that is you and a broker. When dealing with CFDs, you are not expected to reveal the full capital amount you have ready for investment against a stock price. All your dealings are based on the margin and you end up paying anywhere between three to 20 per cent of the stock price that has come up. This can also be on the index of the product or any other security.

To make things clear. For a $1000 worth of shares, with a margin of 10 per cent, your investment is expected to be $100. If the market moves up to $1200, your share is $200 profit. Your next move would be to invest $220 that is 10 per cent of $1200 and so on. This kind of dealing is called “marked to market”. An evaluation of this is done at the end of the day or at the close of business. Because you invest only around $100 of your capital, you can own several places like this. It often works out to a much better position than if you actually owned the stock.

Its simple to understand that the CFD contract is meant to be on the difference only – this means the profit or the loss involved. Should you terminate the contract, you will get a profit from the dealer for exiting your place. If you are in the losing position, you end up paying the dealer to opt out. This profit and loss is calculated based on the differences between the opening and the closing prices on a business day. In some cases, one share refers to a single contract and in this way you can be over a 100 contracts going at once. If you want to assess the total value of all your contracts, then you will have to multiply that number with the corresponding underlying share value.

General Investing

A Low-info Diet Might Just Be To Improve Your Trading Skills

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Today, it is easy to get lost with so much information, offers and deals flying everywhere all around us. Most of them are not worthy paying attention to and will only jeopardize your process of becoming a successful trader / investor in the stock market. There are some opinions and books that will definitely enhance and help you as you start your trading career, but most of them won’t. Be very selective when subscribing to an e-mail group or reading a small article on the World Wide Web: those small things will sum up to a big difference.

I would like to recommend to you doing a low-info diet. Try it for a week and see how it feels like. I have done it and I will never go back to the way I have used to use the web for information and quality content. I have used to subscribe to all and every single web group that I could find regarding the markets and trading. Then, one day, I did something great: unsubscribed from all of them.

This has been, by far, the most enhancing and enlightening experience that I have had so far. My trades performed way, way better when I started listening to my instincts and what I believed it was true. Since I was no longer getting distracted with all different opinions from analysts all around, I could focus entirely at the trade that was in front of me. That has helped me to earn more month after month besides reducing my stress levels dramatically since I was no longer trying to read and understand everything that was going on.

Try it for a week, maybe two, maybe even a month and see how it feels like. Try to no read every morning every single newspaper that is already bookmarked in your favorite internet browser. Do that for a time and see how it feels. Maybe you will see that you did not need that much information to start with and you will be able to really select and read the information that is valuable to you.

General Investing

Safe Trading in Fluctuating Markets With CFDs

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Money remains the driving force in the modern world. The lack of investment and revenue options can result in many difficulties for the common man in many ways. The stock market has emerged as one of the most lucrative options available for traders across the country. With the resurgence in the economy, investors are returning to the market and looking to create an opportunity through the trading options available. But, the unpredictability of the market remains a major factor playing on the minds of many people. In such cases, the use of CFDs has found popularity among many low-budget investors. The CFDs allow people to gain even in a fluctuating market making them a popular and effective investment opportunity.

A CFD or Contracts for Difference is a contract between the buyer and the seller to settle the difference in the current asset value and the contract asset value. Added to the low transaction charges of the website, they have become one of the more preferred trading options for both large and small traders in the market. These asset trading formats allow the trader to gain a profit even in unpredictable and fluctuating markets. The increasing demand for CFD trading has led to a rise in the number of CFD providers available in the market. These providers can offer a range of benefits like low trading costs and help in maximizing the profit earned by the trader.

The advantages of the CFDs lie in their simple working process. The accuracy of the trader in predicting the movements of the market and their ability in investing in the right assets is the key to making profit in this trading format. Depending on whether the market is set to rise or fall, the CFD broker can choose to bid at the top end or lower end of the quote. Moreover, unlike share trading, the traders never actually own an asset. Their position remains limited to the contract, thus reducing their losses to a great extent. In addition, features like time adjustments for going long or short on the trading as well as day trading is the USP of the CFD trading format. It offers more flexibility to the traders and also offers them access to a wide range of trading assets across different commercial markets. However, learning more about the right strategies on CFDs is important for traders in the market.

There are many websites online that offer information and training lessons on CFD trading in the market. With the help of these websites, it is possible for people to learn about trading formats and issues to watch out for when choosing assets for CFD trading. There are also many websites that provide information about CFD provider available in the market and offering lucrative deals to traders. However, it is important that users choose reliable and trusted online CFD provider to indulge in this trade. The credibility of the information available on the website is also an important aspect that needs to be paid attention.