In the live futures markets, a trader has two basic choices: buy or sell. When you buy a futures contract, you are “going long” the market in the hopes that prices will rise. For most people, this is the traditional, intuitive mode of capital investment. But what does it mean to short a futures contract?… Read more.
A futures contract is a highly leveraged financial derivatives product. And, while the added leverage boosts the trader’s capital efficiency, it can also lead to exorbitant losses. Two ways that astute traders manage their use of futures leverage are with the margin to equity ratio (ME) and the margin equity percentage. What is margin equity… Read more.