One of the most common questions I always get by people who is interested in starting their trading journey is “Is Futures Trading Worth it?” I mean, the obvious answer is yes. But what most people don’t answer is “why it’s?” and despite just showing you an earning, I’m going to show you the advantage of trading futures.
Futures are simply a derivation of financial assets, they are mostly used to gain exposure to some financial instruments. The main advantage that futures have over any other asset is that futures are amazing for managing and hedging risk. Most traders are into futures mainly because of their desire to reduce risk.
I’m not going to go over the definition of futures trading or how it works, already have written about it many times. Futures contracts are structured in a different way and this gives some advantages, like versatility and the opportunity for new traders. While trading futures can give a lot of opportunities to manage risk, they have a lot more benefits over traditional stocks and forex. I talk more about some of the most popular futures Trading Strategies here.
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Despite what I have already told you, there are a lot of benefits of trading futures. And those include longer trading hours, lower trading costs, and better leverage.
Yes, it is
If you’re a traditional stock trader, you may think of a futures contract as something esoteric. Many trader thinks the contract rollover is complicated. But the opportunity they can offer is huge and no one should ignore this. Probably the most attractive advantage, futures trading can offer to a casual investor is the opportunity to manage and hedge risk. On the other hand, the most attractive advantage for new investors is the price futures can have and the liquidity. Besides the lower commission.
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