Imt Custom Business

Archive for the ‘Futures’ Category

Who says that dealing with debt is an easy thing to face in life? If you are currently dealing with such problem and do not want to be stuck forever in the debt, you need to get over the stress that you probably have had. You need to do quick actions by figuring out solutions. Here is a little help. One of the solutions that you can take is to take debt counseling. Taking such counseling will help you understand how you can manage your debt so that paying the debt will feel less stressful and burdening. However, you will need to stop using your credit card or taking loans from the bank or anywhere else if your income is just enough to cover the debt and buy basic needs for your life.

There are many companies out there that offer debt counseling or credit card debt relief that you can try to find. They are also available on the internet and can be reached through their website. You want to make sure that you will work with a good company so that you will get the best results that you are expecting. Therefore studying the company through the website is important.

Futures trading is one area of investing that can be downright intimidating to even seasoned investors. Littered with wonkish jargon and trading strategies that many stock and mutual fund investors may not be familiar with, futures trading can scare off many investors before they even give it a try. All that said, futures trading does have one distinct advantage over trading other asset classes: The potential for big gains that can be accumulated in short time frame. Of course, those big gains depend on your system, strategies and a host of other factors, but we’ll address those factors later on in this piece. Choices Aplenty In The World Of Futures Trading

Trading futures is similar to options in that futures markets give traders exposure to a broad swath of asset classes and that is another advantage of futures as an asset class. Want to trade commodities such as oil, gold and soybeans? Futures trading has you covered. Want to make a bet on the direction of a particular forex pair? Again, there’s a place for you in futures trading. Futures trading can also give investors exposure to indexes such as the Dow, Nasdaq and S&P 500 along with single-stock futures. And don’t fret if bonds are your cup of tea. There is a futures market for select US Treasuries as well.

As you can see, futures trading is far from limiting in terms of choices. Versatility is important in trading and trading futures can give you the versatility your trading returns may be needing.

Loving Leverage In The World Of Futures

You’ve probably heard the word leverage tossed around a lot by financial commentators and pundits in the wake of the financial calamity that enveloped many markets across the globe during 2008. Leverage became a dirty, four-letter word and the mismanagement of leverage was attributed to the downfall of several large financial institutions.

In the world of futures trading, consider leverage both a pro and a con. For the purposes of introducing you to futures trading, consider leverage as the market’s way of making your dollars go further. Let’s use gold futures to illustrate our point.

In a traditional gold futures contract that trades on the Chicago Board of Trade (CBOT), the investor must purchase 100 troy ounces of gold (the measurement of gold in financial markets) at 10 cents an ounce. And let’s assume that gold is trading for $1,000 per troy ounce. That means in a traditional gold contract, the investors exposure is $100,000! (100 x $1000/oz. = $100,000). You certainly won’t pay $100,000 for the contract, but your dollars are stretched a long way by the use of leverage in the futures world.

Now the flip side of this coin is that while you could possibly make $100,000 on a single trade if all goes right, the chance exists that if you don’t have stop losses in place, you could also lose $100,000, likely far more than your initial capital investment. And losing more than your initial investment is one of the rubs of trading futures.

Don’t Fret: There’s A Cheaper Way To Trade Futures

While that gold example may seem a little daunting, there is a way to get involved with futures trading without risking your entire nest egg. As futures trading has increased in popularity and more investors have wanted to get involved without investing five and six figures, E-mini futures have become more accessible to retail investors.

The advantage of trading E-mini futures, especially for new futures traders, is clear. Let’s use the gold example again. The mini-gold contract traded on the CBOT gives the investor control of just 33.2 troy ounces, making the cost of the contract $3.32 instead of $10 and significantly lowering the investor’s exposure.

Margin requirements are also lower with E-mini contracts. Your broker may require $5,000 in margin for a standard S&P 500 contract. If that’s the case, you can reasonably expect the required margin for the S&P 500 mini will be about $2,500. Advantage: Less risk, less capital required.

There are some drawbacks of trading E-minis though. Obviously, since you’re risking less money, your profit potential is diminished as well. There are also fewer trading options available to E-mini traders. For example, there is no mini contract for lean hogs. The E-mini futures market is also not as liquid as the traditional futures market and this can mean that there may not be a buyer around when you want to exit your position.

Futures Trading: More Pros Than Cons

At the end of the day, futures trading is a great avenue for investors seeking to magnify their returns. That’s not up for debate. Yes, futures trading has its risks, but what asset class doesn’t? Take the time to test your strategies on a demo account and understand how to properly manage leverage. That advice can put you on your way to harnessing the profit power of futures trading.

Nifty (S&P CNX Nifty) is the Index of Indian share market on NSE (National Stock exchange), just like the Sensex on BSE (Bombay Stock Exchange). The Nifty Futures movement is based on Nifty index.

Lot Size – One Nifty Future Lot consists of 50 quantities of Nifty. Trading in Nifty Futures and Options has to be done in multiples of 50 Quantities (1 Lot size).

Expiry – Each contract of Nifty Future and Nifty Option of a particular month expires on the last Thursday of that month. That is, traders have to square off their positions in that particular month on or before the Last Thursday of the month.

Trading – Trading in Nifty Futures and Options is similar to trading in any Stock or Derivative. One needs a Demat account and then he can place orders to buy/ sell Nifty contract through his broker. There is a margin amount that is needed to buy 1 lot of Nifty Futures. The exact margin amount differs for different brokers, ranging from Rs. 25,000 to Rs. 40,000 for one lot. For Nifty Options, the amount required to buy 1 lot would depend upon the Premium of that particular option at that particular time. Depending upon whether one thinks that Nifty would go up or down, he can either decide to Buy or Sell a contract of Nifty Futures. If one thinks that the market can move down, he may Sell Nifty first and then Buy later at a lower price to make profit. This is unlike taking delivery of stocks, where one can only make money by Buying and hoping that the market moves up.