Investing In Futures

Understanding Opportunities and Risks in Futures Trading

*This information is provided by  the National Futures Association.

Investing in futures markets have been described as continuous auction markets and as clearing houses for the latest information about supply and demand. They are the meeting places of buyers and sellers of an ever-expanding list of commodities that today includes agricultural products, metals, petroleum, financial instruments, foreign currencies and stock indexes. Trading has also been initiated in options on futures contracts, enabling option buyers to participate in futures markets with known risks.

1. Introduction

2. Futures Markets: What, Why & Who

3. The Market Participants

4. What is a Futures Contract?

5. The Process of Price Discovery

6. After the Closing Bell

7. The Arithmetic of Futures

8. Futures Initial Margin

9. Basic Trading Strategies

10. Buying (Going Long) to Profit from an Expected Price Increase Selling

11. (Going Short) to Profit from an Expected Price Decrease Spreads

12. Participating in Futures Trading

13. Deciding How to Participate

14. Regulation of Futures Trading

15. Establishing an Account

16. What to Look for in a Futures Contract

17. The Contract Unit

18. How Prices are Quoted

19. Minimum Price Changes

20. Daily Price Limits

21. Position Limits

22. Understanding (and Managing) the Risks of Investing In Futures

23. Choosing a Futures Contract

24. Liquidity

25. Timing

26. Stop Orders

27. Spreads

28. Options on Futures Contracts

29. Buying Call Options

30. Buying Put Options

31. How Option Premiums are Determined

32. Selling Options

33. In Closing