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In the capital markets, the term “risk” means different things to different people. At the exchange level, risk is a function of systemic liquidity. For institutional investors, it’s a degree of market exposure. For retail traders, risk is the amount of money in harm’s way at any given time. However, no matter your role in… Read more.
In the real world, the term safe haven refers to a physical place where a person can escape from danger. In finance, a safe haven is an asset that holds or increases its value amid uncertainty. Whether a ship’s captain seeks a harbor to ride out a storm or an investor shifts liquidities to safe… Read more.
Among the many advantages of futures trading is its utility in regard to risk management. Futures give market participants the ability to directly increase or decrease exposure to almost any asset class. This is possible because of three primary futures market characteristics: standardization, liquidity, and volatility. Given these benefits, traders may proactively limit risk by… Read more.
Unlike other financial instruments, futures contracts allow traders to benefit from rising or falling asset prices. You’re not limited to the buy side of the market, which means that you can also generate profits from the sell side. By using bull spreads, bear spreads, and associated strategies, you can secure market share by being either… Read more.
In the real world, as well as in the markets, managing risk is a critical part of avoiding financial catastrophe. From buying a life insurance policy to diversifying your portfolio, actively addressing risk can save countless dollars and provide peace of mind.
No matter what your goals and resources are, having a structured approach to market entry, exit, and risk management is a necessity. Without this type of plan, the vast majority of futures trading strategies will fall short of their potential. In reality, active traders have thousands of strategies at their disposal. The best ones are… Read more.
Cross commodity hedging is a popular way of managing risk for producers and speculators alike. Also referred to as cross hedging, this financial strategy involves opening positions in related markets to mitigate systemic exposure. While sophistication levels vary wildly and depend upon a variety of inputs, this methodology is a viable way of protecting wealth… Read more.
Unfortunately, risk is an unavoidable part of life. Whether you’re buying a house or jumping out of an airplane, you assume some degree of risk. In the world of finance, active hedging is like a skydiver’s parachute ― when properly used, catastrophe may be routinely averted. Let’s take a look at three ways of making… Read more.
Futures trading is often characterized as being similar to playing poker or betting horses for a living. The possibility of financial loss brings with it negative connotations ― the high wash-out rate for market newbies only fuels the fire. When it comes right down to it, many people view futures as nothing more than a… Read more.
The product market has turned, and the live hog prices are following them. Below is how the weekly product market changed for the week ending 8/18/ 17 *Product Price Monday 8/14 Price Friday 8/18 Net Change Loins 82.71 81.80 (.91) Butts 92.05 93.12 1.07 Picnic 58.98 54.54 (4.44) Rib 128.35… Read more.