Financial Markets Book Financial Markets For The Rest Of Us
An Easy Guide To Money, Bonds, Futures, Stocks, Options, And Mutual Funds
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by Robert Hashemian

Page 105

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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  • Book Chapters
    Table of Contents Copyright and Disclaimer Foreword Money
    Bonds Futures Stocks Options
    Mutual Funds Retirement Final Words Appendix A

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