Look After Your Futures by Trading Commodities

Trading futures is simply another way to invest money in the stock market.

Basically we trade our money in a commodity which will be delivered at some future day. Before you should start maybe have a look at some stock trading courses on the subject, but, in the meantime, let us illustrate some of the main points that you must know.

Let us say that a farmer is growing and nurturing some corn somewhere at present. When it is fully grown he will want to harvest it and then sell it.

He could create a futures contract to sell that grain to a buyer when it has been harvested. There might be many buyers who would be interested in purchasing that particular farmer’s produce if he is well respected in the marketplace.

This competitive element would be beneficial to the farmer as he could negotiate a higher price.

In fact it is a great contract for both sides as the purchaser knows how much he will be paying for his supplies next year and the seller has the incentive to get the crop ready in time. The grain producer and the buyer will get a written contract which will be signed by both parties and the person buying will probably need to 선물옵션 deposit some cash into the vendor’s account as a guarantee of future payment.

This paper contract would then be kept somewhere safe to be brought out at completion time.

Now is where it gets interesting because the farmer or the buyer is able to sell that contract on to some other interested party. This could happen if the buyer decided that he already had sufficient grain for another year and did not need any extra. He could then find someone else who wanted grain next year and sell the contract on to them.

If the farmer decided he did not want to honour the contract, maybe he does not think he will have enough grain, he can sell the contract on to another farmer. This buying and selling can take place many times between the original contract being drawn up and the completion of it.

In fact, there are a lot of people who have no interest in grain at all but just simply want to make some money. They trade these financial contracts and are known as futures traders.

The intention of these speculators trading futures options is to buy the contract at as low a price as possible and sell at the highest margin they can. This is what has created the futures market in places like NYSE and London with the prices in publications such as the Wall Street Journal.

Other commodities that are regularly traded this way include gold and oil

There are obvious dangers involved when you try trading futures but so there are in all stock exchange trading.

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