Futures trading offers a good opportunity for other people to invest in. trading in futures contracts offers people the unique opportunity to invest in something other than stocks. Although sometimes they also operate in the same manner, futures trading presents a different method of earning revenues for the amount invested on it.
There are certain advantages that futures trading offers to interested investors. One of them is that such instruments are considered highly leveraged investments. In order for an investor to own a futures contract, he only needs to invest a small fraction of the value of the contract. Most investors only invest about ten percent of the contract’s value in exchange for trading them. This way, investors may be able to trade larger amounts of commodities than if he ever bought the commodities outright.
If he predicted the movement of the prices of the commodities traded correctly, the investor has a great chance of profiting ten-fold for an initial investment of ten percent of the actual futures contract’s value. That is how leverage works to the advantage of the investor in futures trading.
Another advantage of...
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