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Buy a futures contract

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Category: Futures Trading

If you buy a futures contract on the Australian inventory market index, often known as the SPI (pronounced "spy"), you'll have to put up a margin of round A$2,500, plus A$25 for every level that the market falls. If the market is currently at 4,000, which means you are wielding A $100,000-worth of shares with simply A$2,500.

This implies you're leveraging your funding by an element of 40, leaving margin trading within the dust. This is the superior power of futures trading, and an identical level of leverage applies to most futures contracts. Let's take a look at what it means in practice...

It means if the market falls simply 2.5% you'll lose all your money.

If the market rises just 2.5% you'll double your money. Both of those can easily happen in one day.

If the market doubles in value (typically this occurs each three-20 years), your funding of $2,500 might be price $102,500.

If it halves in value (and this additionally is much from uncommon), you will lose a total of $50,000 - twenty instances your authentic investment.
U.S. Government Required Disclaimer - Commodity Futures Trading Commission

Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. All trades, patterns, charts, systems, etc., discussed in this advertisement and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author and do not necessarily reflect those of the publisher or Tradewins.