Tag Archive | "futures"

How to Invest in the Corn Futures Market


Investing in the Corn Futures Market

corn futures marketFutures vary from typical commodity trades in that you are purchasing a promise or contract to take possession of a commodity by a certain date. Usually, the future is resold before that date is ever met. You trade based upon what price you speculate that the commodity will be worth in the future.

What to Look for in the Corn Futures Market

Once you gain a grasp of how futures are bought and sold, you can isolate which futures you would like to trade. The corn futures market has soared in the last month due to speculation that supplies will be low due to bad weather trends. Extreme heat across the plains in the month of July is thought to have stressed the crop in the pollination phase. This heat may keep kernels from fully developing. This year’s crop is down by 4.2% from the year 2010.

Possibilities for 2012

This speculation may turn out to mean nothing. If what analysts expect comes true, however, it will mean a dramatic increase in the corn futures market. Now might be the perfect time to buy up corn futures. Even if the supply does not drop as sharply as analysts think, any decline would be profitable for investors trading corn futures. There is a great deal of risk involved in this type of investing. If supply increases or demand decreases, corn futures will lose values, and investors will take large losses. The safest way to invest in futures is to purchase them as a way to diversify your investment portfolio. It is never a good idea to rely on one sector of the market for all of your investment income.

Futures are a complex method of trading, but can prove to be quite lucrative when traded smartly. If you take part in this market, be well informed and cautious. The corn futures market in 2011 and 2012 could result in record gains, profiting savvy investors.

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Back to the Land: Trading Corn Futures


Trading Corn Futures: A Lucrative Investment

trading corn futuresInvestors who make their returns trading corn futures have been holding their breath the last few years. A series of health concerns involving some of corn’s most popular products, such as high-fructose corn syrup, have sent the industry reeling, and prices fluctuating. In recent months, however, the market has begun to show signs of stability. While prices are still low, however, they are expected to rise soon. This is good news for the investors who have been holding onto their stock and is great news for anyone who is interested in trading corn futures. Like all futures markets, the price of corn futures depends on a prediction of how much corn will cost in the future. Following a rocky few years, futures prices are remarkably low, making this the perfect opportunity for investors hoping to get a foot in at the ground floor.

 

Trading Corn Futures: Reading the Market

In spite of the bad press corn has recently received, the biggest factor that sets corn prices has always been the growing climate. When trading corn futures, it is important to remember that corn is a plant as well as a commodity, and is susceptible to poor weather, bad soil conditions or unexpected disasters such as earthquakes or hurricanes. One way to ensure that you make a good investment decision is to keep track of corn growing conditions around the world. The internet has made it much easier for investors to follow local farmers’ reports in the biggest corn-producing countries. If you can find out which areas are most likely to have the best crops, and where each company sources their corn from, you will take a lot of the guesswork out of investing. The better you know the industry, the easier trading corn futures will be.

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Why You Should Learn Futures Trading Today


Why Should You Learn Futures Trading?

learn futures tradingThere are many reasons why now is the perfect time to learn futures trading. In order to understand them, however, it is first important to understand what futures trading is. This type of investment deals with commodities such as grains, metals or oil. In a poor economy, most people do not have the money to spend on expensive stocks and bonds. Commodities, however, are, as their name suggests, necessary items for many people. This means that even when the stock market is running slow or stagnant, commodities continue to grow.

Trading in futures means that you are trading based on an assumption of how a particular commodity will perform in the future. Futures trading is an essential part of the commodities business. Essentially futures investors are paying an advance to the manufacturers and retailers of certain commodities, helping them fund their business, while receiving large returns in exchange. Because there is some risk involved, however, it is important that you learn futures trading instead of simply diving in. In the futures exchange, you are dealing with sales that have not happened yet, and it is important to have a true understanding of the market before you invest your time or money.

How Can I Learn Futures Trading?

There are a number of ways to learn futures trading. Many investors learn by simply giving it a try. While this works for some people, it carries too many risks to be a viable investment strategy. On the other hand, taking formal classes in business and investment can be expensive and all of the students stay on the same playing field because they are given the same information. There are a number of books that detail how to become an expert futures trader. There are also a number of online guides and How To websites. It is always important to check the background of these sites, to make sure that they are providing you with unbiased information. If you can find a reliable guide, you will be sure to learn futures trading quickly and with ease.

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Globex Futures: The Electronic Way to Trade


The Advantage of Globex Futures

globex futures

Since its inception in 1992, the Globex futures trading system has taken the Chicago Mercantile Exchange (CME) by storm. It has become the preferred method of futures trading for most investors. In fact, numbers indicate that up to 70% of the total trading that takes place at CME is done using the Globex system.

Before Globex futures were introduced, investors could only trade futures using the open outcry method. This meant that they would have to go the exchange in Chicago and stand in the pit with hundreds of other investors. As stocks were called, they would signal which ones they wanted to buy. Even today, 30% of all transactions take place through open outcry. Traders must wear different colored jackets that signify their role, and must know arb, a complex system of hand signals that allows them to communicate with each other. The pit is only open for trading during regular trading hours.

Globex Futures: The Easy Way to Invest

Globex futures has been offering an alternative to the open outcry method for nearly twenty years. In essence, Globex is an electronic version of the CME pit. It is a platform that gives investors access to every futures stock on the market. At first, it could only be accessed through booths around the periphery of the Chicago Mercantile Exchange. Today, however, traders from around the world can use this platform to buy and sell stocks from the comfort of their office or their home. It is now even possible to access Globex from a smart phone or other mobile device. The system is open 23 hours each day, meaning that even those traders who prefer the pit can use Globex to do business outside of regular trading hours. No matter where you live, or what commodities you trade, Globex futures can improve the speed and the ease of your transactions.

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Emini Future Trading: Best for Beginners


The Benefits of Emini Future Trading

emini future tradingWhile Emini future trading holds a number of benefits to all investors, they are particularly suited to beginners and non-professional traders. In fact, this type of stock was first introduced to the market as a way to entice would be investors who were a little bit gun-shy. Emini futures were introduced in 1997 and were a near-instant success. From the start, their main selling point was their small size and their ease of use. This is even what gave them their name. The “mini” is a reference to the fact that they are one fifth of the size of most futures contracts, and therefore need only one fifth of the margin to trade. The “E” was added because they were easily traded online, using the Globex platform.

Emini future trading has a number of additional benefits, besides the size of the stocks and the ease with which they are traded. Emini brokerage fees are lower than the fees for standard futures stocks, although they vary somewhat from broker to broker. The stocks themselves have a high liquidity, which has a positive affect on their offer/bid spreads and can stop their value from slipping. Additionally, investors are required to report only a minimal amount in their taxes. American investors enjoy the added benefit of lower tax rates on Emini stocks.

How to Get Involved in Emini Future Trading

If you want to start your own Emini future trading portfolio, there are a number of routes you can take. While stocks have been bought and sold through brick-and-mortar brokerage companies, Emini futures were designed to be traded online. Once you have developed an investment plan, all you need to do is sign up with one of the many futures trading companies on the internet. Do a bit of research to find out which brokers offer the most benefits and the lowest fees. Once you are sure you have found the right company, you can start your career in Emini future trading.

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Investing In Aluminum Futures


The Profitability of Aluminum Futures

aluminum futures

The advantage to investing in aluminum futures rather than simply investing in aluminum as a commodity may not be immediately apparent. It is the flexibility of futures contracts that make this sort of investment attractive. Since aluminum is an important element in construction, automobile and aerospace materials it is in constant demand in developing countries, especially in China. Futures contracts in aluminum allow investors to achieve great returns when prices go up after the contracts are purchased.

How to Trade Aluminum Futures

Aluminum futures are legally binding, financial instruments that specify the date, amount and price of a delivery of an aluminum shipment. The usual size of such a shipment lot is 20 or 25 metric tons. The date is fixed but the one thing that a contract cannot control is the market value of a commodity future. After you buy the aluminum futures at a certain price, it is possible that aluminum will experience a significant increase in value. Due to the flexibility of futures contracts, you can sell the contract ahead of delivery and take the difference in prices as your profit.

Since it only takes a small fraction of the full price of aluminum futures to acquire leverage over the entire contract, you do not need to work for a big investment firm in order to have the money to buy a lot of these futures. Independents and day traders can also achieve profitable returns with aluminum futures with a comparatively small amount of money.

Three different exchanges host the buying and selling of aluminum futures: the London Metal Exchange, the New York Mercantile Exchange and the Tokyo Commodity Exchange. The currencies and lot sizes differ at each exchange. Aluminum futures have such worldwide availability because of their ubiquitous use in many financially significant industries.

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