Futures 101

Discussion in 'Index Futures' started by Comptalk, Dec 7, 2006.

  1. I am going to start to dip my foot into futures and I just wanted to see if anyone can give me a starting plan of how this is different from stocks and bonds, as well as how to start to trade futures. Links to guides and information would be helpful as well.

  2. No offense or anything, but you should know the difference between stocks and bonds BEFORE you start. Bonds are futures...interest rate futures, but I dont trade them at all so I have no idea where to point you. Good luck though.

  3. MrPaul


    Hey comptalk,

    What kind of futures are you looking at? index, commodity etc?
  4. Generally speaking, to get your arms around the concept. Futures is kind of like getting allot more of margin buying power just without the typical retail like structure of interest rate charges or actual margin use all together.

    In other words its all about leverage and not having to put out huge amounts of capital. However, this can be a double edged sword of course.

    So take stock futures for instance. One contract essentially gives you 4X the buying bower versus you acquiring the stock outright, plus the underlying capital requirement for the contract is only typically 20-25% depending on your broker. So you can see the tremendous value. You are essentially getting 4-1 buying power, not having to use broker's margin, and only coming up with 25% of the capital.

    You may want to start here:

  5. Last time I checked, corporate bonds are not futures.

    Looking at Oil, Gold, Silver and Indexs. Just need to be pointed in the right direction.
  6. Comp - if starting in futures, I would like at:
    1) INDEXES - ES, YM, NQ, ER2
    2) Euro FX - EC
    3) Crude Oil - QM

    And for some foreign feel, you can always look at the DAX and STOXX as well.

    Cash - there are normal 'bonds' out there as well - corporate bonds, municipal bonds, mortgage backed bonds, etc... not everything out there is a day-trading futures instrument. Just like stocks - there are stock futures, as well as individual stocks.
  7. There is educational material at some exchange web sites.

  8. Where would I find these symbols and volume for the above mentioned items? Is there like a most active list such like with equities?
  9. Retief


    Where would I find these symbols (ES, YM, NQ, ER2, EC, QM) and volume for the above mentioned items? Is there like a most active list such like with equities?

    Sign up with prorealtime.com and go for the end-of-day option, which is free. It has both futures and equities. When you launch your prorealtime workstation, choose the option for predefined lists, and scroll through the lists and look at mini CBoT futures and CME E-mini futures, for example. Prorealtime will let you chart the contracts and even backtest.

    You can also take a look at the free one-month trial for trackntrade at www.trackntrade.com. Very nice charting for future contracts, with the contract details available at the click of a button and various indicators available, such as seasonal effects.
    #10     Dec 8, 2006