Futures

A future contract is a contractual agreement, generally made on the trading floor of a futures exchange under terms and conditions established by a federally regulated futures exchange market, to buy or sell a particular commodity or financial instrument during a specific month at a pre-determined price in the future. Everything about a futures contract is standardized except its price.

Today, future trading assumes a vital role as an investing, speculating tool and hedging device against interest rate or price risk. PIONEERS FOREX offers futures trading on cash settlement basis only and will not undertake delivery for clients on any futures contract.

Benefits:

Low margin requirement, High leverage
Futures operate on margin, meaning that in order to take a position, only a fraction ($1,000) of the total value ($100,000) needs to be available in cash in the trading account. However, it is important to remember that higher gearing creates greater profits if one correctly anticipates movements in Futures prices and vice versa.

Ability to go short
In many jurisdictions, the process to go short in an individual share is not allowed. Future contracts create the ability to sell quoted contract and the potential to benefit from price declines as well as rising ones. There is no 'uptick rule' for example like there is with stocks.

Instant fills
Electronically traded futures could be done within a second. There is no need to call up a broker and wait for a fill from the trading floor. Orders are immediately placed on the electronic order book and filled as soon as a match is found.

Regulated future exchange
Futures contracts are traded at centralized, government-regulated exchanges, which ensure fair practices. This way, investors are ensured that their trades will be honored. Centralized exchanges also mean liquid markets, which makes it easy to establish and offset your trading positions as desired.

Click here to view an Futures trading example