Commodity futures contracts are legal agreements for buying or selling a given commodity upon a future date. The contract stipulates the amount of the commodity and the price. Usually, the contract is for delivery of the commodity although some contracts allow cash settlements instead of delivery of the commodity. However, the vast majority of commodity futures contracts are liquidated prior to the date of delivery. Commodity futures contracts are traded through exchanges that are registered with the CFTC.
What Is a Futures Contract In Trading?
For the majority of commodity futures the contact is a means of hedging risk. Commodity producers can lock in a price for their product using a futures contract thus limiting their risk. Speculators buy and sell commodity futures in attempts to profit from fluctuations in the market, do not own the commodity in question, and do not intend to own it. Rather the trader will enter and exit a trade using rules-based trade entry, management and exit for the best results.
Wall Street Futures Trading
Rather than trading stocks directly, a trader can trade stock futures. A stock future is a contract whereby one agrees to buy or sell a specific quantity of a specific stock for a set price on a future date. Futures prices are commonly higher than the spot price of the stock itself. The difference is referred to as the cost of carry and is the interest cost of a similar position in a cash market carried to expiration minus any expected dividend. Unlike with stock options both buyers and sellers of futures are obliged to buy, sell, or settle for cash at expiration.
Web Based Futures Trading
In order to trade futures a trader needs access to a trading platform. At DayTradeSafe we highly recommend NinjaTrader which provides advanced charting, a trade simulator, connection to NinjaTrader Brokerage or other brokers such as TD Ameritrade or Interactive Brokers, real-time Forex data, and back testing and strategy development tools. An alternative that some traders use is web based futures trading where the trader can connect to a software-as-a-service platform where the software is online. In general, this approach offers fewer useful tools and features than a professional trading platform like NinjaTrader.
What Time Do U.S. Futures Start Trading?
Futures trading hours depend on the type of futures being traded. Agricultural commodities, interest rates, stocks, energy, and others each have their own hours for trading. However, the majority of futures start trading Sundays at 6pm Eastern Time. Trading closes Friday afternoon at 4:30pm or 5pm Eastern, depending on the commodity. Every day there is a pause in futures trading of thirty to sixty minutes at the end of the business day.
What Is Binance Future Trading?
Binance is an exchange for trading futures on cryptocurrencies. It opened in 2017 and is registered in the Cayman Islands. It is touted as a way to gain exposure to cryptocurrencies without actually owning any. Traders should note that Binance is being investigated by both the United States Internal Revenue Service and Department of Justice for allegations of tax offenses and money laundering. The UK Financial Conduct Authority ordered Binance to cease all activity in the UK as of June 2021.
Veritas Trading Futures
Veritas is a business that offers futures trading advice. If you are going to trade futures successfully you need more than advice about futures. At DayTradeSafe we offer a course from which you can graduate at a benchmarked professional trader. Our graduates use an exclusive mechanical system designed for success. And, our students learn consistent rules-based trade entry, management, and exits for consistent trading results in trading commodity futures as well as stocks and Forex.
Virtual Futures Trading App
Anyone who is starting out trading futures, options, currencies, or stocks should never trade their own money until they have developed the necessary skills. Traders using the NinjaTrader platform can do simulation trading until they routinely generate profits and only then switch from a virtual futures trading app to trading in the real world with real money. Although there are various apps that offer virtual futures trading we highly recommend using the one that comes with a professional trading platform such as NinjaTrader as you also come acquainted with the platform itself as you learn futures trading.
To learn more about TradeSafe, please click HERE
To watch a Replay of a recent online workshop about the TradeSafe Mechanical System, please click HERE