As most investors know, hundreds of strategies and ideas exist which can be used to capitalize on any market. Undoubtedly, everyone has a different way of putting his or her money to work. Because of the development of modern portfolio theory in the country’s best management schools, one investing behavior that every money manager encourages… Read more.
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.
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.
In this article, I’ll discuss six risk management methods investors may not normally consider but should be actively practicing while trading in the futures market. Properly managing one’s risk may not reap bountiful profits in and of itself, but in my experience, it ensures that your short-term trading doesn’t result in short-term involvement in the markets.