Once you have secured the three staples of life ― food, water, and shelter ― ensuring financial security starts taking on an added importance. With an internet connection and a bit of risk capital, it’s possible to achieve a wide range of your finance-oriented goals via futures and options trading.
Aside from the basic “I want to make money!” mantra shared by most active traders, specific objectives vary greatly from person to person. However, no matter how unique the individual or goal, the ultimate reason for entering the marketplace boils down to at least one of the following activities:
- Working at a professional endeavor
- Seeking supplemental income
- Engaging in wealth preservation
- Pursuing extraordinary returns
Goal #1: Trading as a Profession
For many people, the primary reason for showing up to the market every day is to secure a living as an active trader. In order to succeed, a trader must consistently take enough money out of the markets to cover losses, expenses, and the cost of living. Sounds easy, right?
Unfortunately, becoming a professional trader is much easier said than done. Shortcomings in the risk management, capital resourcing, and strategy execution departments frequently undermine the probability of long-term success.
Nonetheless, all is not lost. In comparison to other markets (e.g. equities), futures and options trading offers traders a vast collection of opportunities that span the gamut of asset classes. In addition, the capital resources necessary for nailing down a livable wage is reduced due to the availability of leverage. Simply put, you want to become a professional trader, futures and options are worth a look.
Goal #2: Generating Supplemental Income
One of the more common objectives for active traders is to supplement an existing income. This goal is especially prevalent among doctors, lawyers, engineers, and other successful professionals. Given adequate risk capital and an above-par mental acuity, why not boost income via active trading?
In practice, futures and options trading can be a great way to generate extra income. With near 24-hour sessions and products such as managed portfolios or automated systems, a trader can engage the markets without taking time away from a full-time job. You’re free to trade on your terms, when and how you deem necessary.
Goal #3: Wealth Preservation
Sooner or later, everyone with a job and bank account must address risk. No matter if you’re planning an estate for retirement or for the fall harvest, futures and options trading can help.
Perhaps the single largest advantage to futures and options contracts is their risk management applications. A wide variety of asset classes are available, including ag commodities, metals, energies, and equities. In addition, contract durations may be customized to fit almost any investment horizon or wealth management plan.
Goal #4: The Pursuit of Extraordinary Returns
Last, but certainly not least, is the pursuit of extraordinary returns. This is one area where futures and options trading have few equals ― the ability to realize large profits through capital risk.
Of course, what is considered to be a “large” profit to one person may be relative peanuts to another. Nonetheless, the leverage and consistent volatility of futures and options are capable of generating profits exceeding standard expectations.
For instance, during the “Trump Rally” of 2017 to 2019, the S&P 500 returned 20.8% on invested capital. If properly managed, a strategy of “buying dips” in the current front-month E-mini S&P 500 futures contract could have generated far superior returns to that of a traditional “buy and hold” methodology.
Achieve Your Goals with Futures and Options Trading
One of the premier benefits of the futures and options markets is the flexibility they provide participants. No matter where your goal falls on the financial spectrum, futures and options can help make it a reality.
For more information on how to begin capitalizing on the opportunity of futures and options, check out the client service suite at Daniels Trading. From self-directed online functionality to managed portfolios, Daniels Trading has everything you need to make futures and options a part of your financial game plan.