Future contract trading

Future contract  trading

A futures contract allows traders to speculate on the price movement of commodities, currencies, stock market growth and other assets. Consider the fluctuations in the price of a commodity like gold. A futures trader profits by anticipating the direction gold prices will move. To understand, futures trading and futures markets we can consider one of the earliest forms of future trading in the past.

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How to buy stocks

How to buy stocks

So you want to start buying stock ?, but don’t know where to start? Here are a simple few steps to getting started and understanding the world of stock trading. While it sounds difficult at first, it actually is easy once you get the hang of it. To start off, you have to make a broker account with your local exchange, this will give you the power to buy and sell your stocks.

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Put Option

Put Option

A put option is an option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time. This is quite opposite of a call option, which gives the holder the right to buy shares. If the price of the stock declines below the specified price of the put option, the owner/buyer of the put has the right, but not the obligation, to sell the asset at the specified price, while the seller of the put has the obligation to purchase the asset at the strike price if the owner uses the right to do so. In this way the buyer of the put will receive at least the strike price specified, even if the asset is currently worthless.Put buying is the simplest way to trade put options but should be careful.

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Call Option

call option

Options Contracts  is one of the types of derivatives . In the Options Contracts  have further  two types  call option and put option , right now we will discuss about Call option. A call option is an agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period.The seller (or “writer”) is obligated to sell the commodity or financial instrument to the buyer if the buyer so decides. The buyer pays a fee (called a premium) for this right.When a call option is bought, you are buying the right to buy a stock at the strike price, regardless of the stock price in the future before the expiration date. To compensate for the risk taken, the buyer pays a premium fee, also known as the price of the call. The seller of the call is said to have shorted the call option, and keeps the premium (the amount the buyer pays to buy the option) whether or not the buyer ever exercises the option. 

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What is Binary Option

What is Binary Option

A binary option is a type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes or no proposition, hence “binary”. A binary option automatically exercises, meaning the option holder does not have the choice to buy or sell the underlying asset.

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How to Find Good Stocks to Trade

How to Find Good Stocks to Trade

Whether you are looking into investing into stocks or mutual funds, you will need to focus on minimising your transaction costs. By rule of thumb, the transaction cost should not exceed 2% of your total purchase and this is what smart investors do to protect their assets and ensure profitable returns. Transaction costs are usually common in brokerages, but there are brokerages and markets which do not charge you a transaction fee or a commission.

For example, if you are investing $350 in the market, 2% of the purchase is $7 and that is the ideal transaction fee for this situation. Especially for small-time investors and new brokers, experts have always recommended to invest in businesses one understands and businesses which interests an individual.

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How to trade in Penny Stocks

How to trade in Penny Stocks

Penny stocks have a fairly simple principle: spend less money and earn large profits. However, trading penny stocks is always a good way to lose money, unfortunately. If you understand how to invest and play the game of penny stocks, it is possible to make a profit but it is much more difficult for those who don’t. Penny stocks have many scammers and manipulators.

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What are Penny Stocks?

What are Penny Stocks?

What are penny stocksPenny stocks are common shares of small public companies that trade at low prices per share. In the United States, the SEC defines a penny stock as a security that trades below $5 per share and is not listed on a national exchange. In the United Kingdom, stocks priced under £1 are called penny shares. These types of stocks are generally considered to be highly speculative and high risk because of their lack of liquidity, large bid-ask spreads, small capitalization and limited following and disclosure. Trades are often done through the counter through the OTCBB and pink sheets. 

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What are derivatives?

What are derivatives?

What are DerivativesA derivative is a financial contract with a value that is derived from an underlying asset. Derivatives have no direct value in and of themselves and their value is based on the expected future price movements of their underlying asset.Derivatives can be used for many purposes, including insuring against price movements (hedging), increasing exposure to price movements for speculation or getting access to otherwise hard-to-trade assets or markets. Derivatives are contracts between two parties that specify conditions (especially the dates, resulting values and definitions of the underlying variables, the parties’ contractual obligations, and the notional amount) under which payments are to be made between the parties. 

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How to trade in derivatives

How to trade in derivatives

Financial DerivativesBefore knowing how to trade in derivatives, it is important to know some common terms. The first term to be explained is a forward contract. In a forward contract, two parties agree to do a trade at some future date, at a stated price and quantity. No money changes hands at the time the deal is signed.Forward contracting is very valuable in hedging and speculation. The classic hedging application would be that of a wheat farmer forward -selling his harvest at a known price in order to eliminate price risk. Alternatively, a bread factory may want to buy bread in order to assist production planning without the risk of price fluctuations. If a speculator has information or analysis which forecasts change in prices, then they can go long on the forward market instead of the cash market. The speculator would go long on the forward, wait for the price to rise, and then take a reversing transaction making a profit.

The types of derivatives investment methods include:

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