Courses 1Lesson 1

3.

Futures Markets Make Big Moves

Prices fluctuate dramatically almost every day.  There is considerable opportunity to

win or lose daily in futures trading.  Many markets will permit potential returns of

100% or more per day on the required margin money (i.e., money required to buy or

sell a contract).

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© 2000 MBH Commodity Advisors, Inc.

This, too, can work for or against you.  Where there is great opportunity, there is often

great risk as well.

4.

Futures Markets are Very Liquid

By this I mean that it is possible to get into or out of a market very quickly.  This is not

so with many stock and real estate investments.  Some speculative stocks rarely trade,

and real estate is often hard to dispose of quickly.

With futures transactions, as with active stock transactions, one can enter and exit within

minutes, or even seconds.  This makes the market ‘ideal’ for the speculator with limited

capital.

It is possible for the individual to begin with an even smaller amount of capital.  In most

other areas considerably greater capital is required.  The small amount of capital can

work for or against you -- most often against you.