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momentum change so you can jump on moves a lot earlier than other day traders giving you a distinct adavantage over every one else. You have to trade with the bots....i.e the trading robots or HFT sysyems ( high frequency trading) and program trading computers these huge companies and trading houses have. Sceeto helps you do this by telling you when it's happening and giving you alerts to tell you what way to expect the market to move.Once you trade with it you'll wonder how you did without it. We have Sceeto indicators for Crude Oil Futures, S&P E- Mini Futures , Euro, US Dollar Futures as well as The Russell Futures.....get the free signals sign up for a free no obligation trial at http://www.sceeto.com you'll be glad you did.
Courtesty wikepedia creative commons Futures contractFrom Wikipedia, the free encyclopedia (Redirected from Futures trading)
Jump to: navigation, search In finance, a futures contract is a standardized contract between two parties to buy or sell a specified asset of standardized quantity and quality for a price agreed today (the futures price or the strike price) with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange. The party agreeing to buy the underlying asset in the future, the "buyer" of the contract, is said to be "long", and the party agreeing to sell the asset in the future, the "seller" of the contract, is said to be "short". The terminology reflects the expectations of the parties—the buyer hopes or expects that the asset price is going to increase, while the seller hopes or expects that it will decrease.
In many cases, the underlying asset to a futures contract may not be traditional commodities at all -- that is, for financial futures the underlying asset or item can be currencies, securities or financial instruments and intangible assets or referenced items such as stock indexes and interest rates.
While the futures contract specifies a trade taking place in the future, the purpose of the futures exchange institution is to act as intermediary and minimize the risk of default by either party. Thus the exchange requires both parties to put up an initial amount of cash, the margin. Additionally, since the futures price will generally change daily, the difference in the prior agreed-upon price and the daily futures price is settled daily also. The exchange will draw money out of one party's margin account and put it into the other's so that each party has the appropriate daily loss or profit. If the margin account goes below a certain value, then a margin call is made and the account owner must replenish the margin account. This process is known as marking to market. Thus on the delivery date, the amount exchanged is not the specified price on the contract but the spot value (since any gain or loss has already been previously settled by marking to market).
A closely related contract is a forward contract. A forward is like a futures in that it specifies the exchange of goods for a specified price at a specified future date. However, a forward is not traded on an exchange and thus does not have the interim partial payments due to marking to market. Nor is the contract standardized, as on the exchange.
Unlike an option, both parties of a futures contract must fulfill the contract on the delivery date. The seller delivers the underlying asset to the buyer, or, if it is a cash-settled futures contract, then cash is transferred from the futures trader who sustained a loss to the one who made a profit. To exit the commitment prior to the settlement date, the holder of a futures position can close out its contract obligations by taking the opposite position on another futures contract on the same asset and settlement date. The difference in futures prices is then a profit or loss.
Contents [hide]
1 Origin
2 Standardization
3 Margin
4 Settlement - physical versus cash-settled futures
5 Pricing
5.1 Arbitrage arguments
5.2 Pricing via expectation
5.3 Relationship between arbitrage arguments and expectation
5.4 Contango and backwardation
6 Futures contracts and exchanges
6.1 Codes
7 Who trades futures?
7.1 Hedgers
7.2 Speculators
8 Options on futures
9 Futures contract regulations
10 Definition of futures contract
11 Nonconvergence
12 Futures versus forwards
12.1 Exchange versus OTC
12.2 Margining
13 Further reading
14 See also
Betting Signals.Please make sure to sign up for free signals by taking a trial at http://www.sceeto.com and if you sign up after get a discount by using promo code "save35" . Please also check out http://www.binaryforecast.com for monitoring Emini trend free. Sceeto is a set of real time indicators that monitor the order flow or buy sell flow orders coming in and out of the markets meaning you get a real time signal or alert as to the way the big companies, trading houses and banks are trading before the price and
momentum change so you can jump on moves a lot earlier than other day traders giving you a distinct adavantage over every one else. You have to trade with the bots....i.e the trading robots or HFT sysyems ( high frequency trading) and program trading computers these huge companies and trading houses have. Sceeto helps you do this by telling you when it's happening and giving you alerts to tell you what way to expect the market to move.Once you trade with it you'll wonder how you did without it. We have Sceeto indicators for Crude Oil Futures, S&P E- Mini Futures , Euro, US Dollar Futures as well as The Russell Futures.....get the free signals sign up for a free no obligation trial at http://www.sceeto.com you'll be glad you did.
Courtesty wikepedia creative commons Futures contractFrom Wikipedia, the free encyclopedia (Redirected from Futures trading)
Jump to: navigation, search In finance, a futures contract is a standardized contract between two parties to buy or sell a specified asset of standardized quantity and quality for a price agreed today (the futures price or the strike price) with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange. The party agreeing to buy the underlying asset in the future, the "buyer" of the contract, is said to be "long", and the party agreeing to sell the asset in the future, the "seller" of the contract, is said to be "short". The terminology reflects the expectations of the parties—the buyer hopes or expects that the asset price is going to increase, while the seller hopes or expects that it will decrease.
In many cases, the underlying asset to a futures contract may not be traditional commodities at all -- that is, for financial futures the underlying asset or item can be currencies, securities or financial instruments and intangible assets or referenced items such as stock indexes and interest rates.
While the futures contract specifies a trade taking place in the future, the purpose of the futures exchange institution is to act as intermediary and minimize the risk of default by either party. Thus the exchange requires both parties to put up an initial amount of cash, the margin. Additionally, since the futures price will generally change daily, the difference in the prior agreed-upon price and the daily futures price is settled daily also. The exchange will draw money out of one party's margin account and put it into the other's so that each party has the appropriate daily loss or profit. If the margin account goes below a certain value, then a margin call is made and the account owner must replenish the margin account. This process is known as marking to market. Thus on the delivery date, the amount exchanged is not the specified price on the contract but the spot value (since any gain or loss has already been previously settled by marking to market).
A closely related contract is a forward contract. A forward is like a futures in that it specifies the exchange of goods for a specified price at a specified future date. However, a forward is not traded on an exchange and thus does not have the interim partial payments due to marking to market. Nor is the contract standardized, as on the exchange.
Unlike an option, both parties of a futures contract must fulfill the contract on the delivery date. The seller delivers the underlying asset to the buyer, or, if it is a cash-settled futures contract, then cash is transferred from the futures trader who sustained a loss to the one who made a profit. To exit the commitment prior to the settlement date, the holder of a futures position can close out its contract obligations by taking the opposite position on another futures contract on the same asset and settlement date. The difference in futures prices is then a profit or loss.
Contents [hide]
1 Origin
2 Standardization
3 Margin
4 Settlement - physical versus cash-settled futures
5 Pricing
5.1 Arbitrage arguments
5.2 Pricing via expectation
5.3 Relationship between arbitrage arguments and expectation
5.4 Contango and backwardation
6 Futures contracts and exchanges
6.1 Codes
7 Who trades futures?
7.1 Hedgers
7.2 Speculators
8 Options on futures
9 Futures contract regulations
10 Definition of futures contract
11 Nonconvergence
12 Futures versus forwards
12.1 Exchange versus OTC
12.2 Margining
13 Further reading
14 See also
