Welcome to Futures Trading Guide
Trading Futures And Options Article
This is a selection made from among articles on Trading Futures And Options. For a permanent link to this article, or to bookmark it for future reading, click here.
Electricity Futures Trading on Nymex
from:
The New York Mercantile Exchange is a US-based futures exchange that deals with energy futures, as well as options in gasoline, crude oil, propane, natural gas, electricity and heating oil, and even base and precious metals.
It is the largest physical commodity futures exchange in the world and is considered the premier forum for precious metals and energy trades. Traders who are looking for liquidity alternatives that can counter their bond and stock investments normally flock to the Nymex.
To start trading electricity futures on the Nymex, you have to first open an account with a Nymex accredited, series 3, commodity futures broker. This broker will be your point of entry into the electricity market, so you have to make sure that you make the right choice.
By 'right broker', it is meant that your representative should have ample experience and background in the electricity futures trading environment. He should have a considerable level of expertise in the market and, preferrably, operates in just the electricity market, in order to avoid potential conflicts of interest.
There are brokers that prefer to deal only with companies and institutional investors, but there are also some that cater to smaller units and individuals.
Once you have chosen your broker, you must then assess your current financial standing, your knowledge of the options and futures trading methods, find out how much you are willing to risk and the purpose and objective of your investment.
No two commodity trading accounts are alike, because each is tailored to fit your needs, so you can't really accurately compare with others. However, doing so with an investment that falls within your range will give you an idea on how to go about the process.
The largest electricity market in the world is administered by PJM Interconnection LLC, which is a Nymex affiliate. To date, over 44 million clients participate in PJM from all over the world. Power firms that are members of PJM normally hold over 1,000 generating units, or around 137,000 megawatts of capacity.
Electricity is fit for futures trading because of the following reasons:
- it has a large spread of buyers and sellers
- electricity rates are forever changing and volatile
- it is fungible
The best time to trade electricity futures is during its peak hours, which usually run from 7AM to 11PM. However, you may also trade during off-peak hours, which go from midnight to 7AM. For more information about trading electricity futures, visit the Nymex web site.
Trading Futures And Options News
TABB Says Trading of VIX Products Has Grown at a 5-Year CAGR of 130%, Introducing Lucrative Arbitrage Opportunities
Traders tell TABB Group that VIX exchange-traded products have been a key driver behind the trading of VIX futures and options, expanding at a five-year compound annual growth rate of 130%, quite possibly influencing the price of the index the products they have been designed to track.
Read more...CBOE to Launch Trading in CBOE Emerging Markets ETF Volatility Index Options on January 31
CHICAGO, Jan. 24, 2012 /PRNewswire/ -- The Chicago Board Options Exchange (CBOE) announced today that it will begin offering trading in options on the CBOE Emerging Markets ETF Volatility Index (VXEEM) ...
Read more...Options and Futures Articles
Here we'll provide you with insight on how options work, how they are useful and why you might consider adding them to your portfolio. This options strategy allows your profits to soar in a sideways market.
Read more...Exchanges deal failure to open up futures market
LONDON (Reuters) - The failed merger of Deutsche Boerse AG and NYSE Euronext has highlighted their grip on Europe's futures and options trade, raising the prospect of reform to open the market to new entrants. European futures and options trading, estimated at some $62 trillion in 2011 by the World Federation of Exchanges, is systemically important to the European financial system. Largely ...
Read more...Gold COT Report - Futures
The COT reports which we look at each week provide a breakdown of each Tuesday's open interest for markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC. The weekly reports for Futures-and-Options-Combined Commitments of Traders are released every Friday at 3:30 p.m. Eastern time.
Read more...Pros and cons of options versus futures
For retail investors looking to broaden their horizon, the first step is usually options because they can be traded in the same account as equities. Many then take the next step into futures, but the two ...
Read more...Pros and cons of options vs. futures
For retail investors looking to broaden their horizon, the first step is usually options because they can be traded in the same account as equities. Many then take the next step into futures, but the two ...
Read more...CME Group Announces Record Energy Trading Volumes
NEW YORK, Feb. 8, 2012 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives marketplace, today announced it set a new record for trading volumes for its energy products on Tuesday, February 7. Trading volume for energy futures and options contracts...
Read more...