The Complete Guide to Futures Trading: What You Need to Know about the Risks and Rewards

The Complete Guide to Futures Trading is your futures trading handbook. The professionals who have contributed to this effort bring decades of devotion and experience in the futures industry to the subject matter. We challenge you to learn from their experience, and as a result, make an informed decision about whether futures are right for you and your investment portfolio. We sincerely hope that this book convinces you that there may be a place for futures in your investment playbook, and guides you in making appropriate decisions about how you trade. A twenty-first–century investor needs to know about the investment of the twenty-first century. That investor is you, and that investment is futures.

Introduction:

Futures are the investment of the twenty-first century. At the beginning of the twentieth century, investing in stocks was considered a risky proposition for individuals, who were advised to stick to buying bonds. Now, over 50 percent of U.S. households invest in the stock market directly or indirectly through mutual fund holdings—even in retirement accounts. At Lind-Waldock, we believe writers of the twenty-second century looking back on the twenty-first will say the same about investment in futures.

Although U.S. futures markets began in the mid-1800s, they didn’t have global significance until the 1980s, when companies and governments worldwide embraced the instruments as financial management tools. Futures markets have always been about price discovery and transfer of risk, so are ideally suited to environments of uncertainty and high volatility—an apt description of the past 30 years.

The collapse of the gold standard in 1972 led to free-floating currency exchange rates—and the first financial futures contracts, foreign exchange, at the Chicago Mercantile Exchange. Inflation throughout the 1970s and early 1980s led to record-high interest rates—and new futures contracts in U.S. Treasuries and Eurodollars. Stock index futures came into their own during the bull market of the 1980s, and were an inextricable part of the institutional investor’s playbook within less than five years.

Now, futures are part of a savvy individual investor’s playbook, too. Technological advances—most significantly, the Internet—have transformed the futures trading landscape. Today, individual investors are on a level playing field with professional traders and institutional investors, particularly in electronically traded futures contracts, with online order entry and execution. What’s more, “mini” products created specifically to appeal to individual investors are now standard among exchange offerings.

This book reveals the many ways that individuals can use futures for trading and portfolio diversification. Our aim is to remove the mystique about trading futures, clear up common misperceptions, and prepare individuals to begin using futures as a trading or investment tool in a responsible manner. The products are highly leveraged and marked to the market daily. Thus, the industry is well-regulated and has superior financial safeguards in place to ensure trading integrity.

Contents:

• Futures: The Investment for the Twenty-First Century
• Becoming a Futures Trader
• Trading with a Broker as a Partner
• Letting the Pros Trade Your Account
• Using an Auto-Executing Trading System
• Resources for the Self-Directed Trader
• Knowing Your Margins and Marching Orders
• Futures: Diverse Markets You Can Trade
• Options on Futures: A Flexible Trading Tool
• Forex: Another Opportunity for Traders
• Deciding to Trade
• Opening an Account
• The Tax Factor for Traders
• The Business of Futures: Who Does What

The Complete Guide to Futures Trading: What You Need to Know about the Risks and Rewards By Lind-Waldock pdf