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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.


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The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.