By Sam Seiden, Online Trading Academy Director of Online Education
One of the fastest growing and most popular asset classes in the world is Futures. There are a few reasons why this asset class is so attractive to both retail and professional market speculators.
Some Benefits of the Futures Markets:
- No $25,000 minimum requirement like you have in Equities
- Plenty of leverage, low margin requirements
- Most of the major Futures markets that we want to trade have close to 24 hour trading
- Only set of markets in the world where you have real non-correlated / diverse opportunity which is key when applying a true low risk / high reward trading strategy
- Lower risk if you use protective stop orders because overnight gap risk goes away with markets like the S&P futures and others; also, these are some of the most liquid markets in the world
- Huge volume, 24 hour electronic trading, low commissions
- 60/40 Long term capital gains tax treatment
One of the biggest obstacles to getting started in anything we desire to do is just that, getting started. While we at Online Trading Academy have a complete education path for those interested in trading the powerful global Futures markets, there are a few very good resources you can review, as well. On the internet, you can find endless information on Futures. The issue is that most of it is packaged into slick marketing, attempting to get you to buy into useless programs and information. To be safe, here are some web resources that in my opinion, you can trust, find very important information in, and be comfortable with.
CME Group (CME): www.cmegroup.com
This is the home of most of the Futures markets you would ever want to trade. It is the combination of the Chicago Mercantile Exchange, the Chicago Board of Trade, and New York Mercantile Exchange. The education department is great for trading and for information on the products/markets they offer. For information on the markets you are looking for, simply click on the market (S&P Mini for example) and then click on the "specifications" and you will get all the information on that product. They also offer tutorials and literature on the specific markets and Futures, in general.
Eurex Exchange: www.eurexchange.com
This is one of the fastest growing exchanges at the moment for futures traders. It is 100% electronic and always has been. It's a Euro exchange so understanding the information on the website may not be as easy as the others, but this is one exchange you want to pay attention to if you're going to expand beyond stock trading. If you spend time on this website, focus on the major markets such as FESX, FDAX, FGBL, and FGBM. These are very attractive markets for many important reasons, price points, tick values, volume, and more.
Chicago Board Options Exchange: www.cboe.com
Here you will find everything you need to know about options. They have a deep education offering on the website and plenty of home study tutorials. While this exchange is primarily in the business of stock options, anyone interested in trading options, or learning options for any asset class would benefit from this website.
These are all exchanges, not broker dealers or other types of vendors. You can feel comfortable calling them for assistance and help with understanding Futures and specific Futures products' specs. They have nothing to sell you, they want you to feel comfortable trading their products. If you have any questions on this or other topics, email me anytime.
Have a great day.
- Sam Seiden sseiden@tradingacademy.com
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