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Are you Set to Trade Futures Online?
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Majority of investors would agree that that the futures market is a key economic center. A hub for intense competition among buyers and sellers and also a means to stabilize prices. The futures market is particularly precarious and intricate by nature. If that does not scare you, then you have the heart for online futures trading
But first things first, it is very important for you to know that when trading futures online or not, you never actually buy or sell anything physical; you are merely entering into an agreement to do so at a future date.
While you will perform the role of either buyer or seller or both, in trading futures, you are just a speculator, expecting to profit from increasing or decreasing prices.
You do not intend to make or take the actual delivery of the goods you are trading, your goal is to buy at a minimum and sell at the highest possible price or vice versa, therefore making your purchase earn you a profit. Prior to the expiry of your contract you will need to sell your contractual obligation to take or make delivery.
A futures contract therefore, is a type of investment instrument, in which two investors agree to negotiate on a set of financial instruments or physical commodities for delivery at some future date, usually three months, at a set price.
If you invest on a futures contract, you are agreeing to buy something that is not physically there yet at a fixed price. But participating in online futures trading does not necessarily mean that a buyer or a seller will be accountable for receiving or delivering huge inventories of physical goods.
Participants in the futures market primarily enter into futures contracts to minimize risk or speculate rather than to exchange physical goods with a goal of earning a profit.
As market prices are highly volatile and susceptible to economic movement, the futures market is a game of both chance and wit, therefore, definitely not for the risk averse.
Basically, futures exchanges offer two venues for trading: the conventional floor-trading venue and electronic or online trading.
Note that regardless of venue, trading is essentially the same in either format: Customers submit orders to be carried out by other traders who take equal but opposite positions, trading at costs which other customers buy or purchasing at prices which other customers sell. This matching of buyers and sellers occur in both floor and online trading.
The main difference is that in floor trading, orders are relayed to brokers in a trading pit, via phone calls from customers or through computers. Customer bids and offers are presented by brokers to other brokers standing in the pit, and matches are made.
Results of the trade are relayed to customers, then sent to clearing house and brokerages, and prices are spread instantly throughout the world. The order is time-stamped at the opening and closing of the trade.
For online trading, customers send buy or sell orders directly from their computers to an electronic marketplace offered by the exchange. Brokers are no longer needed to submit and execute orders for the customers as brokerage approval to trade as well as notice of activity to brokerages are instantly carried out by the computer. Notice the absence of the brokers in online futures trading?
The exchange online system notes all trading activity, and pinpoints matches of bids and offers. Trade information is then sent to the brokerage and clearing house, therefore prices are faster relayed to the public.
Electronic Futures Trading Brokers News
CME Group to Allow Brokers to Trade Futures, Swaps on One Screen - Bloomberg
 Farm Futures | CME Group to Allow Brokers to Trade Futures, Swaps on One Screen Bloomberg CME Group Inc. (CME), the world's largest futures exchange, will allow traders who arrange transactions between banks to buy and sell futures and swaps through one electronic screen. CME Direct will allow so-called inter-dealer brokers to use one ... CME Group Launches CME Direct Technology for Online Trading of Exchange Listed ... Electronic trading comes to OTC oil swaps New Trading Platform for CME |
US Futures Point to Lower Open - Wall Street Journal
 Moneycontrol.com | US Futures Point to Lower Open Wall Street Journal More than three hours before the start of trading, futures on the Dow Jones Industrial Average fell 75 points to 12402. S&P 500 futures dropped 9.1 points to 1305.70, while Nasdaq-100 futures lost 15 points to 2520.25. Changes in futures don't always ... US stock futures drop ahead of EU summit U.S. Stock Futures Swing Between Gain, Loss as Facebook Slumps US STOCKS-Futures signal rebound, G8 assures investors |
OIL FUTURES: Crude Falls In Asia; Focus On EU, Iran, Stock Data - Wall Street Journal
 CBS News | OIL FUTURES: Crude Falls In Asia; Focus On EU, Iran, Stock Data Wall Street Journal On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $91.14 a barrel at 0648 GMT, down $0.71 in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell $0.61 to $107.80 a barrel. Oil futures extend gains in electronic trading Oil Falls Below $90 as Supplies Rise, Erasing Gains Through 2011 Oil Trades Near Two-Day Low on Iran Deal, Rising Supplies |
Interactive Brokers Group, Inc. Receives NASDAQ Notice of Non-Compliance with ... - MarketWatch (press release)
Interactive Brokers Group, Inc. Receives NASDAQ Notice of Non-Compliance with ... MarketWatch (press release) GREENWICH, Conn., May 22, 2012 (BUSINESS WIRE) -- Interactive Brokers Group, Inc. (NASDAQ:IBKR) an automated global electronic broker and market maker, announced that on May 17, 2012 it received a letter from the NASDAQ staff notifying the Company that ... INTERACTIVE BROKERS GROUP, INC. : Receives NASDAQ Notice of Non-Compliance ... |
Crude Options Volatility Gains as Futures Sink - Bloomberg
Crude Options Volatility Gains as Futures Sink Bloomberg The most-active oil options in electronic trading today were July $80 puts, which rose 17 cents to 33 cents a barrel at 2:09 pm with 3419 lots trading. July $100 calls were the second-most active options with 2901 lots changing hands as they fell 13 ... |
New trading hours jostle trade - Agriculture.com
 Agriculture.com | New trading hours jostle trade Agriculture.com On the second day of the new trading hours, the pit floor closing settlement prices appeared earlier than the first day. Does it matter? Well, the Tuesday electronic closing price for July corn futures was 5-cents higher than the official pit ... |
Trade update to Dow Jones and Intraday market analysis - Inside Futures
Trade update to Dow Jones and Intraday market analysis Inside Futures Abdul started developing ABL Trading systems in August 2005 by conducting technical analysis on various futures and commodity markets and now applies it to trading the electronic futures and commodity markets. He holds a Bachelors of Science in Civil ... |
CFTC Approves Expanded CME Trading Hours - Wall Street Journal
 Futures Magazine | CFTC Approves Expanded CME Trading Hours Wall Street Journal By IAN BERRY CHICAGO—The Commodity Futures Trading Commission approved CME Group Inc.'s proposal to expand electronic grain-futures trading to 21 hours a day, the exchange announced. CME submitted the request on Thursday, replacing a prior request for ... CFTC approves extended grain trading hours CFTC approves CME's 21-hour grain cycle CME Amends Grain-Trading Plan After Industry Complained |