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What are Futures?

A futures contract is an agreement, traded on a derivatives exchange, to deliver or take delivery of a specified amount of a security or a commodity of a given grade or quality, or to make a cash adjustment based on a change in the price of the commodity, financial instrument, security or stock indices at an agreed time in the future.
From the buyer's point of view, a futures option is the right, but not the obligation to enter in a futures contract at the exercise price of the futures option granted in return for a premium. From the seller's point of view, the seller has no right as such (other than the right to the premium). The seller will be under the obligation to enter into a futures contract at the exercise price of the futures option if the option is validly exercised.
A call option is an option to buy at a designated price at any time before the expiry date. A put option is an option to sell at the exercise price.

Major features of Futures

Leverage: In order to trade futures or option contracts the trader only has to make a small cash outlay (around 1 % to 5 % of contract face value) called "Margin" to control the full contract value. This results in higher gearing creating large percentage profits if the market direction is anticipated correctly. However the risk of loss also increases proportionally.
Making money from rising AND falling markets: Futures and option trading allows you to make money when markets go up and it also allows the trader to make money when prices fall (shorting).
Variety: Futures and option trading offers a large variety of trading opportunities. You can trade traditional commodities such as grains and oilseeds, soft commodities (cocoa, coffee, sugar, cotton), metals (gold, silver, copper), petroleum products (crude oil, heating oil, gasoline), and livestock (cattle and hogs) or financial futures and options such as currencies, interest rates or share price index futures.
Transaction costs: Commissions charged in futures and option markets as a percentage of contract value are small compared to most other markets. You pay commissions on a per contract per side basis. All commissions are negotiable depending on the volumes and frequency of your trading.
Increased risk: The inherent leverage available through futures and options on futures allows higher percentage returns but will result in larger percentage losses if the position goes against the trader. The trader can lose more than their initial cash outlay if the position goes against them.
Disclaimer
Leveraged products including derivatives trading such as trading in CFDs, futures or option contracts involve the risk of loss as well as the potential for profit. Traders can lose money trading those markets including additional capital to which you have lodged as margin. Trading derivatives is not appropriate for everyone and you should thus carefully consider if trading these markets is appropriate in light of your personal circumstances and risk profile. Refer to a Product Disclosure Statement for further detail.

What markets do we trade?

We offer our futures and option clients access to all major futures and option markets around the world such as:

  • Chicago Mercantile Exchange
  • Chicago Board of Trade
  • Chicago Board Options Exchange
  • New York Mercantile Exchange
  • New York Board of Trade
  • London International Financial Futures and Options Exchange
  • Eurex
  • Singapore International Monetary Exchange
  • Hong Kong Futures Exchange
  • Sydney Futures Exchange
  • New Zealand Futures and Options Exchange

Why TradingPro for Futures?

  • TradingPro's proprietary online order platform enables efficient, accurate execution of futures orders.
  • Daily recommendations with fully disclosed performance figures. TradingPro is the only provider who tracks performance in this way
  • Access to all the major futures and options markets around the world
  • Direct exposure to currencies and commodities
  • Personal account manager
  • Multiple options for order placement including email/phone and online orders all at the one low brokerage rate
  • Weekly commentary and monthly support sessions
  • Unlimited phone, email and online support
  • A comprehensive Home Study Course (optional extra)

Performance of recommendations

Click here to receive the performance figures of the TradingPro recommendations.