Trading in futures and commodities market can provide one with a whole lot of merits. The only paramount method to double your profits is trading in futures. The conservative choices like collectibles, real estate, bonds, and even stocks can give the huge profits like futures and options trading can give. Why do veteran investors look to invest in commodities as well even though it is not so ideal? Such a hefty profit for so small a waiting time. The susprising and most wanted outcome is the Leveraging. Just for an illustration if an Investor A is having $10,000 with him and is looking out for options to trade in the futures to multiply the money. In this scenario, an investment advise of single S&P index futures would have been advised by his broker. He has finally arrived at the decision that the market will go up after making a lot of enquiries and study. The only choice that A has is to invest in stocks or S&P futures to make a profit after putting in all the necessary efforts.
Is there a differentiation between stock and futures investment? For instance if an Investor B feel that a bull market is likely and has taken a position on the first day with a view to hold it for atleast two weeks. To benefit from investing, B requires an amount of $350,000 to buy stocks and the amount of $10,000 is not enough. After two weeks, Investor B has gained as much as $20,000. It is not very bad for a span of two weeks, isn’t it? But what happened with Investor A who has only invested $10,000 in S&P futures trading contract? Taking the futures route, Investor A has gained as much as $20,000 for his $10,000 investment. You have doubled your money in just a matter of two weeks! This is an actual example of what futures trading can do. Your investment of $10,000 on first of September 1996 would have fetched you $20,000 in just two weeks. By no means try to derive from this that the futures trading is a risk-free one. In fact, many have lost their savings and retirement funds when they have traded in the wrong direction. What if A felt that market will move downwards in September 1996 and the end result of that. A buy or sell decision can bring a loss of as much as $20,000. It hardly takes any time for you to squander your money if trading in futures. The investment resolution of any investor should be a well thought decision after through analysis of the market. Author is an expert on Learn Futures
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