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INVSTR TOPIC: FUTURES

by | Apr 11, 2016

Futures Trading is a form of investment which involves speculating on the price of a commodity going up or down in the future. In this video Lea Jakobiak speaks to experts and looks at the way Futures are being used.

Video Transcript

LEA JAKOBIAK (Reporter, invstr): This week we are focusing on trading futures. They usually appeal to the more active investors as they are traded on a short term basis. In fact, they are often bought and sold on the same day but actually once we’ve got the hang of futures they’re not as complicated as they may seem.

MARK FAULKNER (Game Manager, invstr): The futures market arose out of the agricultural market with farmers trying to maintain a guarantee of income. So what they would do is our farmer here we’ve gone have a conversation with a broker whereby he would agree to sell his crop for a fixed price at a fixed date in the future (hint  the term futures markets). Now the broker would pay probably less than the entire crop is actually worth if it came to its full potential but the farmer guarantees his income. So say there’s a really bad year weather’s awful and the crop gets badly decimated the broker still has to pay the fixed amount for the crop. But, if it’s a really good year and there’s lots of produce the broker gets a bump of harvest. 

CRAIG WIFFEN (MD, Peregrine & Black): That means that you’ve admit any possibility for negative market moves over that time period but the downside is that you fail to take advantage of any upside moves.

LEA JAKOBIAK (Reporter, invstr): So, futures contracts are originally popular in the commodity sector but traders also use them to speculate on price movements for bonds shares and currencies and futures can be bought through most brokers.

MARK PRIEST (Head of Index & Equity, ETX Capital): It’s probably slightly for the more advanced but then it is there to use as as others to take advantage of market movement or to use as a hedging tool for for hedging your exposure to the underlying equities and as I said because you can’t short  the market short the individual stocks it’s a great way to cover your position.

CRAIG WIFFEN (MD, Peregrine & Black): More and more finance directors CFO’s becoming aware especially as the older generation start to retire and the new generation come up they’re becoming more and more widely used

LEA JAKOBIAK (Reporter, invstr): So, perhaps a little bit more complicated but don’t let that put you off and if you want to learn more about futures make sure to check out the invstr app.

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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