Read full article here...
The oldest form of trading gets a technology facelift.
The concept of futures trading is as timeless as the marketplace itself. As long as people have been selling such tangible assets as oil, wheat or gold, there have been hedgers who want to protect against the possibility of a future price change and speculators who hope to profit if the hedgers are wrong.
A producer of wheat, oil or another commodity, rather than simply bringing his product to market and taking his chances with willing buyers on delivery day, can hedge by agreeing today to sell his product at a specified price on that future date. Futures speculators buy up the risk that is offloaded by the hedgers; they make a profit if the price moves in a direction different than the hedger anticipates and in addition they now own a fungible commodity they can sell at any time until the delivery date to take advantage of market change over time.
The symbiotic relationship of buyer and seller ensures the liquidity of the marketplace and that capital flows smoothly while providing a “discoverable” price for any commodity at any given point in time. And that’s the way futures trading has operated for centuries... until today.
Electronic futures trading in the 21st century:
Much futures trading is still done with the traditional “open outcry” method in public pits. But traditional trading is giving way to electronic transactions in which a wide variety of indexes—representing everything from basic commodities to the S&P 500—can be traded online 24 hours a day and 5 days a week, using strategies that take full advantage of the skills taught at Online Trading Academy.
Read more about free forex trading training on www.forex-tradingtraining.com
No comments:
Post a Comment