Futures Trading 101

January 5, 2007 by Trader Rich

I mentioned a couple of days ago that I was going to start slowly
looking into the futures market. I've never traded anything but stocks
and currencies so futures is a whole new thing for me. There are many
types of futures contracts that can be traded, such as copper, coffee,
stock indexes, silver, or pork bellies to name a few. Futures contracts can be
full-sized or mini-sized. For smaller investors like myself, the mini-sized contract make sense. For instance, if you wanted to trade soybeans, a full-sized contract is 5,000 bushels. A mini-sized contract is only 1,000 bushels. The Chicago Board of Trade sums up the benefits of trading minis in one sentence. "..mini-sized contracts offer individual
investors and smaller institutions access to the same risk management
and investment tools as larger counterparts but in a size better
able to meet your needs."

I'm particularly interested in trading

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