How to Buy and Sell Stock Futures

Buying and selling stock futures can provide you with an alternative to the traditional stock market. By trading these securities, you will be able to take advantage of several benefits and increase your potential returns. Here are the basics of how to buy and sell stock futures.

Day Trading

One of the most common ways to buy and sell stock futures is through day trading. You can access single stock futures through an online exchange called OneChicago. You can also open an account with one of the many online brokerages that offer the ability to trade stock futures. Once you open an account with one of these online brokers, you will be able to access the market directly from your computer. You should be able to download trading software directly to your computer and then place trades whenever you want.

Trading on your own in this manner requires a great deal of experience and practice. Therefore, you should most likely try to utilize a demo account before you get involved with the real thing. This will give you real-time access to the market and you will be able to perfect your trading strategy before risking your money.

Managed Account

In addition to trading on your own, you might want to consider working with a managed account. Many stock brokers offer managed account services when it comes to the futures market. With this arrangement, you are going to open an account with a stock broker and provide them with your money to invest. They will ask you questions about your investment goals and your trading style. At that point, you are going to give them permission to trade your account for you. They will utilize the services of a professional futures trader in most cases. They will make the individual investment decisions for you and you will get to benefit with the profit from the trades. They will typically take a percentage of what they bring into your account.

Commodity Pool

Another way that you can gain access to the futures market is through a commodity pool. A commodity pool is a group of traders that are all interested in trading the futures market. These traders will combine their money together and act as a single entity when trading the market. By doing this, they will be able to take advantage of leverage that they would not be able to use if they traded on their own. By combining assets together, they will have access to a much larger amount of trading funds.

Many times, everyone will provide input about the trading strategy and goals for the pool. They will also trust the individual trading decisions of the pool to a professional trader. The trader will then place trades on behalf of the pool and everyone will be able to give their fair share of the profits from trading activities. This is very similar to a mutual fund that is involved in the futures market.

blog comments powered by Disqus