Trading Of Futures And Options

By Author: hosi connon
Total Articles: 4
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Those who want to earn by trading futures should have thorough knowledge about this risky field. In order to become a successful trader, one should know how to execute the trades profitably. The aim of the trader must be reasonable as well as realistic and he must be conversant with the latest trends at the international market. The trader must be able to minimize losses and must conduct extensive research. Though it is a highly lucrative field there are risks also. All future contracts have expiry. Hence, the trader has to take timely decisions correctly pertaining to selling the contract or roll over, selling the contract and keep out of the market or taking delivery of the commodity. Future contracts have limits for the daily prices. The price of a particular day will be on the basis of the closing price of the previous day. The individual traders will be asked to deposit a certain amount of money in the account of the brokerage firm before commencement of the trading. Though there are no strict rules, making a minimum deposit may not fetch the trader a good trading.

Those who want to get maximum benefits from ...
... trading futures must know how to protect their assets and maximize their earnings. The size of account with the brokerage firms, expiry of the contract and daily price limits are the most important aspects of this type of trading. Those who have good exposure to these characteristics can do profitable trading and also the risk will be minimized. The dealer must have clear knowledge about the options before going for the trading. He must know whether the option is from U.S or from any other country. While U.S options are more standardized and with lesser risks options from all other countries are not like that. Moreover, exchanges and firms in the U.S are always under monitoring for liquidity whereas futures and contract options from other countries are to be checked individually by the traders.

While doing research about futures and options the trader must find out commission amount and the actual cost of the option. The trade has to pay commission in addition to the option premium. The trader should also know the extent of price appreciation required so that he can make a profit. One should be very cautious while dealing with the brokers. The trader should know whether the service provided to him is worth for the commission paid by him. The broker should inform the trader about execution of the trade.

This content has been taken from http://www.ideamarketers.com/?articleid=3274792&CFID=182857378&CFTOKEN=39318913

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