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clients have a minimum of $50,000 to $100,000 in assets to get started,
which puts futures trading beyond the means of some investors. Many
regular stock brokerages do not handle futures (or futures options),
although they may offer such services through a separate division or
subsidiary. You must then find a broker that specializes in futures
trading in order to trade futures contracts. By the same token, most
futures brokers only handle futures (and futures options) and nothing
else. So if you are also interested in trading other securities (such as
stocks) you would need to work with other brokerages to trade those
securities. Here we present a very basic coverage of the components of
a futures contract order. Chances are that many of us will never trade
futures in our lifetime, but then again some of us might.
Type Of Futures
The first thing you would need to know when trading futures would
obviously be the type of futures itself. If you deal with a live broker, you
can certainly talk it out. For example, March corn futures or June 2001
gold futures and so on. The month is the maturity month of the
specified contract. However, just like many other securities, futures
contracts also come with symbols of their own, which you would
probably need to use if you trade online. The futures symbols are made
of one or two-letter code for the commodity followed by the last digit
of the delivery year followed by one-letter code for the delivery month.
For example, silver's code is AG, gold's code is GH (100 oz.), corn's code
is C, and pork bellies are denoted by PB. Some examples of delivery
month designations are F for January, G for February, K for May, and Z
for December. So corn futures with March 2000 delivery would have the
symbol C0H, or gold futures (100 oz.) with June 2001 delivery would
have the symbol GH1M, and so on. The symbols we used here are based
on the popular CBOT and CME exchanges. Other exchanges may use
different symbols for the same commodities. Also, some contracts may
not have certain delivery months. For example, corn does not have …
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