Posts Tagged ‘futures’

23.02.2011 Post in Trading

Further to our topic dedicated to successful women traders we would like to present the story of Cynthia Kase.

Cynthia Kase got acquainted with trading in August 1983 when she had to undergo a training program in the trading department of the company she was working in. It happened the same year when a contract for crude oil became available. Cynthia persuaded the company to install a compute in the trading room. Cynthia was experienced in computer technologies due to her technical education.

The first and the most important thing about trading realized by Cynthia was that in order to succeed on the market on should act separately from the crowd. Cynthia said several times: “You cannot listen to everybody. I think it is important to be focused, have enough sleep, stay calm and everything will fall into place. It is wrong to always be worried.”

At the moment Kase considers herself an absolutely technical trader, despite the fact that she has been a technical trader since 1985. Further Cynthia Kase starts to develop her own technical indicators that she offers to her clients. At present she is trading for herself and consulting about thirty corporate clients. Kase has developed and indicator – PeakOscilltor – that can use cross-comparison of markets and Dev-Stop – a technology of setting stop orders in accordance with market volatility. Kase has published three articles in Futures Magazine, where she described the technical indicators in details.

Since the first day on the market Kase has not employed intraday trading. Her average deal lasts for 3-10 days. Cynthia Kase prefers energy markets, at the same time she highlights that her technical indicators are suitable for all markets. She also favours physical futures over financial ones, since futures depend on unconditioned and political factors.

Besides, Cynthia Kase says that “There are three most important things. First, you should not listen to someone else’s advice. Second, there is no easy way. You cannot find the Holy Grail. Diligent work and persistence make a successful trader. And third, this should bring pleasure.”

Added by InstaForex Staff

28.07.2010 Post in Trading

The financial market consists of different markets, for example futures market.

The futures trading allows traders to use the capital more efficiently and to increase profit on each profitable deal. The futures contracts make it possible to decrease considerably the potential risks and to protect the positions against losses.

What are futures and how to trade futures?

A futures contract is an agreement between two parties, according to which both parties agree to settle a bargain by a certain date in future. One of the parties undertakes to sell the asset specified in the contract and another party obliges to buy it. Entering into a contract, neither party pays.

Trading futures contracts has a number of advantages. The first is that the trader does not have to pay the full cost of a contract, he/she only makes so-called security deposit. As a rule the security deposit is about 5-10% of value of a contract. You can find the value of the security deposit at the web-site of the stock exchange, on which the futures is traded. Thus, the leverage is formed, for the use of which it is not needed to pay, as it is done in stock trading.

Another advantage of the futures contracts trading consists in low transaction costs. The futures trading allows to use different strategies in order to advance the possible profit and to hedge risks.

The futures trading has two approaches:

– closing of the open positions until the expiration of a futures contract
– delivery of an asset before the expiration of a futures contract

There are several types of futures contracts:

– Commodity futures, assumes that the buyer has to buy and the seller to sell the underlying item of the contract at a set date.

– Financial futures, assumes that only cash settlements are made between participants in the amount to the difference between the contract price and the actual price of the underlying asset when the contract expires without the physical delivery. This type of a contract is used for hedging against the risks.

How to trade futures?

The futures contract trading slightly differs from the trading on the international currency market Forex. The technical and fundamental analysis, same charts and indicators are used on the futures market. However, the futures market has a number of distinctions from Forex market. On Forex market the position can be opened for months or even years, but the futures contract has the specific closing date. If it is not closed by you, then it will be closed forcibly.

The abbreviation of futures contract consists of several parts. The first symbols point to the item (gold, oil, Dow index); next symbols indicate the month and year of futures delivery.

Generally accepted designation of the month in futures contract:

Month Code
January F
February G
March H
April J
May K
June M
July N
August Q
September U
October V
November X
December Z

Also during the futures trading you pay the spread (the difference between the bid price and ask price) as well as the commission. The amount of the commission is stated in the specification of futures contracts.

Futures trading is carried out on the futures exchanges, the well-known futures markets are:
– New York Mercantile Exchange, NYMEX, NMX
– Chicago Board of Trade, CBOT, CBT
– Chicago Mercantile Exchange, CME
– International Petroleum Exchange, IPE
– London International Financial Futures Exchange, LIFFE
– London Metals Exchange, LME

InstaForex Company offers its clients a possibility to trade CFD for the futures. At present over twenty of such-like trading instruments are at our clients’ disposal. At the page of the contracts specification of the company’s official website you can find out more about the futures.

Added by Alexey Skachilov,
Clients’ relationship manager