Do you like commodity trading? In the beginning chances are you will be overwhelmed by the number of tradable commodities to choose from. There are 32 tradable commodities to be exact. Commodity trading presents both challenges and opportunities. Commodities markets are both broad and deep.
How are you going to decide that you want to trade gold or crude oil, natural gas or frozen concentrated orange juice, soybeans or aluminum, silver or palladium? What about corn, feeder, cattle or copper?
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Apart from professional traders and speculators, futures trading is done by most of the people like you and me who are interested in making money in the markets. Like stocks, Buy low and sell high, is the basic premise in futures trading as well.
What is different in futures trading from stock trading? The fact that you can trade futures with leverage on either long or the short positions introduces an additional element of risk not present in the stock market.
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The first choice for many investors was and is the stock market. Many small investors are looking for new avenues after getting their fingers burnt during the recent stock market crash. Investors have many choices for investing their money today.
What about futures trading? Many individual investors make a living day trading futures. However, futures trading is not for you if you are among those who take a look at their mutual funds portfolios only once a year and wonder about the returns. Risk and uncertainty goes hand and hand in money making opportunities. No gain without pain.
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The monthly identifiers for the E-mini S&P futures contracts are H for March, M for June, U for September and Z for December. The E-mini S&P futures contract trade almost 24 hours per day with a 30 minute maintenance break in trading from 4:30 to 5:00 PM daily.
The margin requirements for E-minis are much less than the normal contract. The day trading margin is less than the margin to hold an overnight position in S&P 500 E-mini Futures contract. If you are a new E-mini trader you be careful as traders are expected to pay for the difference between the margins for the entry and exit points. In case you lose at the end of the day you are likely to pay in a big way.
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Regular trading hours for S&P futures contracts are from 8:30 A.M to 3:15 PM. S&P futures contracts are another example of how 24 hours a day trading enables traders to respond to economic news releases in pre-market and after-market sessions. S&P futures contracts are valued in ticks worth 0.1 index points or $25.
Individual S&P futures contract holders are limited to no more than 20,000 net long or short contracts at any one time. The evening session starts at 3:30 PM (15 minutes after the close at 3.15 PM) and continues on the Globex until 8:15 AM overnight.
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