Talk with any hedger and they’re sure to tell you about an experience with trading on margin. Margin is a good faith deposit that a hedger must have in their account in order to initiate a long or short futures position. For example, the margin on a corn contract is currently $2,362.00. This means that… Read more.
The goal of hedging is to transfer price risk from one party to another. Hedging has been used for hundreds of years to help producers and buyers protect themselves from price risk.
When it comes to Futures Spreads, many traders ask us what is the benefit of spreading futures contracts. They want to know why we often choose to spread futures contracts instead of either being long or short a single futures contract or option, or use option spreads instead.
This post originally appeared in FutureSource’s Fast Break Newsletter on March 10, 2010, where Craig Turner is a regular contributor on various futures trading topics. Systematic risk is always a threat to even a well-diversified portfolio. When it comes to trading, we are always aware of systematic risk, and look for ways to hedge it… Read more.
Why do I trade? It’s a simple question, yet the vast majority of traders have not outlined why they trade. How much time have you spent thinking about it? Have you ever written down why you trade? If you haven’t, how do you know what your true motivations are? Have you sorted out what your… Read more.
Why do some traders prefer to spread trade versus trading outright futures contracts? The contracts often selected by the trader may be typically trading parallel to one another giving the trader only the “differential” moves between the two contracts. One may take any two markets that they observe have differentials between the price movement and… Read more.
This post originally appeared in FutureSource’s Fast Break Newsletter, where Drew Wilkins is a regular contributor on various futures trading topics. One of the most common questions a futures broker gets is, “How do options on futures work?” The truth is, options can be as simple or complex as you want them to be. This… Read more.
This is a revised version of an article that originally appeared in FutureSource’s Fast Break Newsletter on September 24, 2004. Have you purchased an option position in the past, and had the market move in your favor, only to ultimately lose money on the trade? Read this article and you might get some answers about… Read more.
For many traders, the Psychology of Trading can be the greatest hurdle they need to overcome in order to be successful. At Daniels Trading, one of our primary goals is to help self-directed online and broker assisted traders overcome this common issue, and get them on their way to achieving the results they are looking… Read more.