Trading equity futures


The Futures markets are different however. Trading Futures is a lot like shopping at Costco. Futures traders are required to purchase contracts with large multiples of the Commodity. This would be like buying in bulk and unfortunately Futures traders cannot buy or sell the individual units of the Commodity as their fellow traders can in the Equity markets.

When a Futures trader sees a last price on their chart, in a newspaper or on a TV screen they are seeing a unit price for that Commodity. But like all other Commodities, Crude Oil is not traded as a unit.

It is traded as a contract that has multiple units in it. The Crude Oil contract calls for delivery of 1, barrels units of Oil. The only other option a Futures trader has to trade smaller contracts is a mini contract size. Unfortunately, all mini size contracts for Futures markets are very illiquid extremely low volume. For this reason it is recommended to avoid trading any of the mini Futures contracts.

The exception to that rule is the Stock Index mini contracts. Here the volume is much higher and more liquid than the full sized Stock Index Futures contracts. The next time you are trading Futures and see the last price on your chart, remember this only represents the price per unit and not the entire contract.

Listed below in Table 1 are some markets and their contract sizes:. Perhaps now you can see why Futures prices can be much more volatile than Equity prices. In our Crude Oil example, if a trader went long at If the price falls to As we have seen in the Futures markets this is not a big move and happens frequently. However, with the size of the contract the loss can grow exponentially.

If the trader was able to purchase just one barrel unit of Crude Oil at There would be no panic in this situation. Treasuries rally, equity futures drop after jobs data. Equity futures drop after weekend without move on U.

European equity futures point to a lower open on Wednesday. European equity futures point to a For more information, read our latest forex news and reports.

Equity futures rise, but "cliff" stalemate suggests more losses. Equity futures were slightly higher at the beginning of electronic trading on Sunday night as talks continued in Washington over resolving the "fiscal cliff. European Stocks, Euro Decline as U. Equity Futures Pare Gain. Asian stocks and U. Suggest other news sources for this topic. This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition.

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