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MARKETS & PRODUCTS
Why trade Futures?
4 Major advantages of trading futures over stocks

why trade futures

Futures and stocks are two of the major classes of financial vehicles available to investors. Futures offer some key advantages over stocks and options, but they also typically employ greater leverage, which can be both a benefit and a risk. Trading futures can open the door to many more opportunities in new markets. 

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Trade Around the Clock
Compared to stocks which have a regular trading session of only 6.5 hours 5 days a week, futures market trade nearly 24 hours a day, 5 days a week. This allows for more flexibility and opportunity to react to market-moving events when they occur.

High Leverage
Futures trading involves leverage, which can empower traders to take a larger position with a smaller upfront outlay of capital*. For example, with as little as $600 you can hold 1 micro gold futures contract equal to around $18,000 worth of gold**.

Short Selling
Futures traders may be better positioned to sell short than stock traders. Futures traders don’t need to borrow shares from their broker or get margin privileges.***

 

Diversify Your Portfolio Across Broader Field
Futures traders can access multiple sectors of the economy including stock markets, metals, agriculture, bonds, energy, commodities and foreign currencies. The ability to diversify your portfolio with futures is unparalleled when compared to the traditional "stocks/bonds/cash" allocation model. 

Highly Liquid Markets
Most futures markets are highly liquid and attracting an ever-growing number of participants trading millions of contracts every day, making it easy to get in and out of a trade with little delay and minimal bid-ask spread.




* Leverage can work against you as well as for you
** Actual gold margin requirement and market price may vary
*** Heavy losses can occur for the short futures position if the underlying asset price rises dramatically

 

What is next?

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