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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?

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

  • 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

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

 

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

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.