A Guide To Futures Trading For Beginners

Are you looking to get started on futures trading but would like to know more about what it entails? At Bold Analysis, LLC, we hear you. We are here to provide you with the resources you need to trade futures like a pro. In this article, we will introduce you to futures trading for beginners.

Understanding Futures Contracts

A futures contract is an agreement between a buyer and a seller to carry out an exchange of a specific good at a stated price on a particular date. Futures contracts can also come with the option of a cash settlement, where the buyer can pay the cash difference between the agreed price of the underlying good and its market price at the time of expiration. One major benefit of trading futures is that it does not experience time decay.

The Value of Futures

Valuing futures is quite different from valuing traditional securities. Although the value of a futures contract is largely tied to its underlying good, its value is also influenced by the time until expiration. This is what makes trading futures unique – the price of the underlying good can change between now and the expiration date, causing the buyer to make a loss or profit.

Futures Trading Gives Traders Access to a Significant Amount of Leverage

One thing to keep in mind is that having leverage is not an inherently good or bad thing. It comes with its own set of pros and cons – although there is the potential of making huge gains; on the flip side, the same can be said about losses. As many futures contracts have expiration dates within a reasonably short duration, traders are only allowed to place a fraction of the contracted value for a contract. This gives traders access to a significant amount of leverage, which is on top of what their broker is able to provide.

Getting Started on Futures Trading – Is It Right for You?

To get started on trading futures, you will have to decide what type of futures you want to trade as well as on which exchanges you will be trading on. Keep in mind that not every broker offers futures trading services, and before you get started, you will have to understand your risk tolerance. Futures trading is recommended for traders with a high-risk tolerance and the discipline to manage trades effectively.

Come to Bold Analysis, LLC, for Futures Trading Resources

So, you have decided to get started on futures trading – congratulations! As a beginner, you may be feeling overwhelmed with the information coming from all directions. When you come to us at Bold Analysis, LLC, you can find all the support and resources you require to start trading successfully. Beginners can get started by opening a live account with us or signing up for our market newsletter.

If you would like to speak to one of our experienced consultants or have questions about what we have to offer, please contact us today.