Lesson #1 -- Background of Futures Trading
Introductory Comments
For many years futures trading has been considered either too risky or too sophisticated for the average
investor.
Most myths are born of ignorance, and the futures myth is no exception. For all too long, futures
trading was either ignored or shunned in economics texts and, as a consequence, the general public
was not educated in the basics of futures. No informed choice could, therefore, be made.
Investments in securities, stocks, bonds and even stock options, however, received considerable
attention. It is generally believed that trading in stocks has more historical justification and, therefore,
more value in an economic education.
There are, in addition, a number of other reasons for the historically diminutive role of futures trading,
few of which are valid.
Generally, objections to futures trading are based on either partial or distorted facts. So, before launching
into an explanation of precisely what futures trading is, it may be necessary to clear the decks of any
misconceptions you may hold.
First, let’s examine some of the standard objections to futures trading, so that we may have a relatively
clean slate upon which to write the new learning.
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