Futures Trading Education

Buying a Futures Contract

Watch this RJOF Quick Tips: Buying a Futures Contract video presented by our Senior Market Strategist, Phillip Streible to learn how a futures contract works and all the things to consider when purchasing one. 




Why Do People Trade Futures Contracts

Leverage is the ability to control large dollar amounts of a commodity with a comparatively small amount of capital.  Traders who purchase a futures contract are attempting to gain bullish exposure. On the other hand, traders who sell a futures contract are attempting to gain bearish exposure.


Things to Consider when Trading Futures Contracts

  • Trade will realize an immediate profit with a move higher than the price bought.
  • Trade will realize an immediate loss with a move lower than the price bought.
  • Margin deposit is required for each contract bought or sold.


Things to Know Before Trading Futures Contracts

  • Understand the leverage and specifications.
  • Understand the margin requirement.
  • Use stop loss orders.