Please inform me on futures trading.

Discussion in 'Energy Futures' started by klurby, Jul 4, 2011.

  1. klurby


    I am new to futures trading everyone, I have a few questions. Why does etrade require a $10,000 account to trade futures? Are futures more profitable than options and stocks? What is different about futures trading? Thanks.
  2. JackR


    Because you can VERY quickly lose money trading futures and your brokerage firm wants to be able to cover your loses with your money rather than theirs.

    Futures are exceedingly risky compared to option spreads. Option spreads are thought of as having a defined risk. Think of futures as selling naked puts and calls.

    Stay away from futures until you:
    1) Understand the extent that an energy future like gold or natural gas can move in 5 minutes. Think of the loss you may sustain, not the gain.
    2) Understand what the leverage available in a futures contract can do to you when a trade goes against you.
    3) Understand "day-trading margin" versus "overnight margin".
    4) Understand event risk in futures vs event risk in options.
    5) Know how you plan to trade them - have a trading plan you can stick to.
    6) Are more mature and no longer have the "Lets Get These Dice Rollin..." mindset you expressed in another spread.

  3. Lornz


  4. Me too. Thought I would do my good deed of the day and post the links.