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Penny Lysgaard

The Facts On Futures Contracts - 0 views

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started by Penny Lysgaard on 12 May 12
  • Penny Lysgaard

    They have a plan of action and follow it, and they're good planners. They understand how to speculate and know the power of securing. They have also carefully organised a strategic strategy, and they also set forth their own risk capital. This means they know how much they can lose, and it will not cause any kind of ill effects on their day to day living expenses.

    I have little question that the contents of this article agitate a few people, and infuriate even more. But I have got sound reasons for writing on this kind of topic and will try to produce a case for the different choices I expound on. Hopefully, my thought will resonate by incorporating people and perhaps turn a few heads. Needless to say, there are a wide range of investments being aggressively promoted to potential traders in the current economic environment. The actual average trader needs to be well-informed for the potential risks, and potential returns associated with the investment opportunities being offered.

    I think one of the most important issues, particularly of late, is the concern of transparency within financial reporting. Both the stock market and futures markets are highly clear exchanges with well-documented record keeping and long-standing procedures in trading. There are well-established trading and clearing procedures in these two kinds of exchanges that have evolved above decades of trading and right now function in nearly seamless fashion, inspite of the number of fiduciary's involved with each individual transaction. To be sure, the particular procedural methodology in stock trading and futures trading are well-established and well documented by means of legal precedent and published in a fashion that each investor should use a firm understanding of the actual risks and procedures involved in those two investment classes.

    However the question is a bit more complex than simple consistent procedures, as some investments lend by themselves to specific types of trading whilst other classes regarding investments are more appropriate for different types of investing. For example, the pure speculator will probably lean towards futures contracts as part of his investment portfolio because of the high level of leverage and volatility futures contracts inherently have got. On the other hand, a conservative investor having a longer-term investment horizon might favor a blue-chip stocks as his favored investment class. Whilst there are instances where stock investing can be quite volatile, through and large stock investing is a a lot more stable investment than their volatile uncle, the futures contract. The important point here is for the average investor to fit his investment targets with a class of investments that will meet his needs and expectations.

    For example, an investor which prefers very volatile investments in hopes of making a tidy profit inside a relatively short period of time probably shouldn't invest in azure chip stocks. Although some erratic movement within blue-chip stocks is possible, they are often fairly stodgy and methodical inside price movement. On the other hand, another investor might truly enjoy the unstable price movement involved in trading oil futures, as an example. Oil futures are often very risky and it takes a steady and competent hand to manage these types of investments profitably. hedging futures

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