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Trading US Stock Futures
 

Trading US Stock Futures

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http://www.ProfitableTradingTips.com - Trading US Stock Futures - The US stock markets fell the other day, as did options and futures on many US stocks. ...

http://www.ProfitableTradingTips.com - Trading US Stock Futures - The US stock markets fell the other day, as did options and futures on many US stocks.
Determining how to approach markets today does not just have to do with trading US versus foreign stocks but with what vehicles to use in trading.
What is the best approach to the market these days?
Is it trading stocks or stock options or is it trading US stock futures?
What is the point of trading US stock futures contracts when one can just as easily buy or sell stocks or stock options?
Single stock futures contracts can be traded on the OneChicago futures exchange and on exchanges from Great Britain to Spain, India, and South Africa.
In a standard stock futures contract one party agrees to purchase and another agrees to sell stocks on a given future date.
The price of the contract, known as the strike price or futures price, is set and does not change no matter what happens to the stock price.
Although no money changes hands between the parties when the contract is entered into US stock futures are traded on margin.
Thus a trader needs to maintain a margin account when trading US stock futures.
Traders engage in the same fundamental and technical analysis in trading futures as they do in trading stocks directly or in trading stock options.

Trading US stock futures offers the trader leverage, because he trades on margin.
Obviously, this can enhance profits or magnify losses.
An attractive feature of stock futures is the ability to simultaneously sell stocks that one owns and engage in a futures contract to buy the stocks back at a later date.
This, in many instances, amounts to a low interest rate, short term loan and is the primary reason that some traders trade US stock futures.
This is known as an Exchange Future for Physical (EFP) transaction.
According to OneChicago,
“An EFP is the simultaneous selling of a stock and buying of a Single Stock Future (SSF) for a long equity position or buying of a stock and selling of a SSF for a short equity position.
SSF have an interest rate built into their price that is determined by a true competitive marketplace. Like repos and reverse repos in the debt markets, EFPs provide a cheap and efficient financing vehicle.”

Just as in successful stock trading, success in trading US stock futures depends upon a thorough knowledge of the basics of the stock in question and of current market sentiment.
In times of extremely volatile stock trading, such as happened in the last year, those who enter long, or “buy” positions expect to see a stock rally and those who enter a “short” or sell position expect to see a stock fall in price.
Those who choose to use an EFP (Exchange Future for Physical) in order to obtain short term financing are well advised to thoroughly understand their stock positions before entering into a futures contract.

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    Trading US Stock Futures Trading US Stock Futures Presentation Transcript

    • THE US STOCK MARKETS FELL THE OTHERDAY, AS DID OPTIONS AND FUTURES ONMANY US STOCKS. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • DETERMINING HOW TO APPROACHMARKETS TODAY DOES NOT JUST HAVE TODO WITH TRADING US VERSUS FOREIGNSTOCKS BUT WITH WHAT VEHICLES TO USEIN TRADING. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • WHAT IS THE BEST APPROACH TO THEMARKET THESE DAYS? W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • IS IT TRADING STOCKS OR STOCK OPTIONSOR IS IT TRADING US STOCK FUTURES? W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • WHAT IS THE POINT OF TRADING US STOCKFUTURES CONTRACTS WHEN ONE CANJUST AS EASILY BUY OR SELL STOCKS ORSTOCK OPTIONS? W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • SINGLE STOCK FUTURES CONTRACTS CANBE TRADED ON THE ONECHICAGO FUTURESEXCHANGE AND ON EXCHANGES FROMGREAT BRITAIN TO SPAIN, INDIA, ANDSOUTH AFRICA. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • IN A STANDARD STOCK FUTURESCONTRACT ONE PARTY AGREES TOPURCHASE AND ANOTHER AGREES TOSELL STOCKS ON A GIVEN FUTURE DATE. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • THE PRICE OF THE CONTRACT, KNOWN ASTHE STRIKE PRICE OR FUTURES PRICE, ISSET AND DOES NOT CHANGE NO MATTERWHAT HAPPENS TO THE STOCK PRICE. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • ALTHOUGH NO MONEY CHANGES HANDSBETWEEN THE PARTIES WHEN THECONTRACT IS ENTERED INTO US STOCKFUTURES ARE TRADED ON MARGIN. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • THUS A TRADER NEEDS TO MAINTAIN AMARGIN ACCOUNT WHEN TRADING USSTOCK FUTURES. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • TRADERS ENGAGE IN THE SAMEFUNDAMENTAL AND TECHNICAL ANALYSISIN TRADING FUTURES AS THEY DO INTRADING STOCKS DIRECTLY OR INTRADING STOCK OPTIONS. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • TRADING US STOCK FUTURES OFFERS THETRADER LEVERAGE, BECAUSE HE TRADESON MARGIN. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • OBVIOUSLY, THIS CAN ENHANCE PROFITSOR MAGNIFY LOSSES. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • AN ATTRACTIVE FEATURE OF STOCKFUTURES IS THE ABILITY TOSIMULTANEOUSLY SELL STOCKS THAT ONEOWNS AND ENGAGE IN A FUTURESCONTRACT TO BUY THE STOCKS BACK AT ALATER DATE. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • AN ATTRACTIVE FEATURE OF STOCKFUTURES IS THE ABILITY TOSIMULTANEOUSLY SELL STOCKS THAT ONEOWNS AND ENGAGE IN A FUTURESCONTRACT TO BUY THE STOCKS BACK AT ALATER DATE. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • THIS IS KNOWN AS AN EXCHANGE FUTUREFOR PHYSICAL (EFP) TRANSACTION. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • ACCORDING TO ONECHICAGO, W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • “AN EFP IS THE SIMULTANEOUS SELLING OFA STOCK AND BUYING OF A SINGLE STOCKFUTURE (SSF) FOR A LONG EQUITYPOSITION OR BUYING OF A STOCK ANDSELLING OF A SSF FOR A SHORT EQUITYPOSITION. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • “SSF HAVE AN INTEREST RATE BUILT INTOTHEIR PRICE THAT IS DETERMINED BY ATRUE COMPETITIVE MARKETPLACE. LIKEREPOS AND REVERSE REPOS IN THE DEBTMARKETS, EFPS PROVIDE A CHEAP ANDEFFICIENT FINANCING VEHICLE.” W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • JUST AS IN SUCCESSFUL STOCK TRADING,SUCCESS IN TRADING US STOCK FUTURESDEPENDS UPON A THOROUGHKNOWLEDGE OF THE BASICS OF THESTOCK IN QUESTION AND OF CURRENTMARKET SENTIMENT. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • IN TIMES OF EXTREMELY VOLATILE STOCKTRADING, SUCH AS HAPPENED IN THELAST YEAR, THOSE WHO ENTER LONG, OR“BUY” POSITIONS EXPECT TO SEE A STOCKRALLY AND THOSE WHO ENTER A “SHORT”OR SELL POSITION EXPECT TO SEE ASTOCK FALL IN PRICE. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • THOSE WHO CHOOSE TO USE AN EFP(EXCHANGE FUTURE FOR PHYSICAL) INORDER TO OBTAIN SHORT TERMFINANCING ARE WELL ADVISED TOTHOROUGHLY UNDERSTAND THEIR STOCKPOSITIONS BEFORE ENTERING INTO AFUTURES CONTRACT. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • AS ALWAYS OUR SUGGESTION IS NOT TOTRADE STOCK FUTURES OR TO IGNORETHEM BUT TO LEARN THE RANGE OFCHOICES AVAILABLE TODAY IN TRADINGFOR TRADING STOCKS BOTH AT HOME ANDABROAD. W W W. P R O F I TA B L E T R A D I N G T I P S . C O M
    • FOR MORE INSIGHTS AND USEFULINFORMATION REGARDING STOCK,OPTIONS, COMMODITIES, AND FUTURESTRADING VISITWWW.PROFITABLETRADINGTIPS.COM.