Futures Trading Basics

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Even the best at online stock trading admit that learning all the ins and outs of the industry makes for a daunting task. Entry into the field involves mastery over its often opaque jargon and complex concepts. At Lightspeed Trading, we strive to design trading tools that assist everyone from the most experienced traders to those just looking to get started.

Part of that endeavor involves education. To that end, we have provided a short glossary of some basic stock market terminology to help all about futures and options trading basics traders on their way. Those with more experience can always stand to review their knowledge, as well. These assets represent investments.

Subsequently, they allow companies, commercial enterprises, and municipalities to raise new capital. These securities denote ownership in a corporation. Generally, stocks consist of two different types:. On the stock market, ETFs trade like stocks but more closely resemble mutual funds. They hold stocks, all about futures and options trading basics, and other assets while remaining tradeable themselves.

Because they reflect an index, their prices change throughout the day. In contrast, mutual funds have their net-asset values NAV calculated at the end of the business day.

ETFs combine the flexibility all about futures and options trading basics stocks with the diversification inherent in mutual funds.

That, in addition to their tax efficiency and low costs, make ETFs an appealing choice for many traders. These highly versatile securities represent sellable contracts. Due to their high liquidity, options usually carry more leverage than stocks but require less capital, giving traders with less buying power more choices when diversifying their portfolios. Futures, like options, consist of sellable contracts. However, unlike options, futures require the holder to fulfill the terms of the contract at the time of expiration.

In practice, traders can still buy or sell futures in much the same way as options. Lightspeed Trader, our trading system for day tradersallows our clients to trade and maintain stocks, ETFs, and options all in the same place.

To learn more about the products and services we offer, call us at 1. Navigating Taxes as an Active Trader. Large Cap Momentum Trading. Open an Account Try a Demo.

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The risks of binary options trading With binary options, it is possible to lose all the money you have invested if none of your trades are successful. Careful money management (see Lesson 6 ) should however ensure that you do not wipe out your entire trading account.

Before buying the option you need to decide how much money you put on the trade. This will be your investment (your risk) and your payout will be a certain percentage of this amount. If the broker is offering a 50 payout, it means, if you win, you get your investment back plus 50 on top of it.