Your Questions About Paper Trading Futures

Mary asks…

wheres a good place to learn about commodities trading?

wheres a good place to learn about commodities trading any books websites or tutorials would all be welcome thanks
or maybe even a course as long as it’s not to expensive

John answers:

Start with a couple beginners books like _Idiots Guide to Trading Commodities_ and _Dummies Guide to Technical Analysis_ or something equivalent (futures trading is usually highly technical in nature).

If you’re working with a futures broker like PFG Best or DeCarley Trading then they’ll have many resources for you to use, too.

Paper Trade before you live trade and live trade small until you get very familiar with the marketplace.

Sharon asks…

Here’s a few trades…?

http://games.espn.go.com/nba/features/traderesult?players=2167~614~1786~991~1828~2004~557~3244~2988~63~1724~883&teams=20~8~8~21~21~21~8~8~8~20~21~20&te=&cash=8:21~8:20

http://games.espn.go.com/nba/features/traderesult?players=592~3238~518~2792~2178&teams=15~15~21~21~21&te=&cash=15:21

Detroit
PG-Andre Miller
SG-Rip Hamilton
SF-Jarvis Hayes
PF-Antonio McDyees
C-Shaq O’neal

Phoenix
PG-Mo Williams
SG-Raja Bell
SF-Tayshaun Prince
PF-Amare Stoudemire
C-Samuel Dalembert

Philly
PG-Chauncey Billups
SG-Andre Iguodala
SF-Boris Diaw
PF-Thaddeus Young
C-Rasheed Wallace

Milwaukee
PG-Steve Nash
SG-Micheal Redd
SF-Bobby Simmons
PF-Yi Jianlian
C-Andrew Bogut

Detroit forms a new nucleus with a big three of miller, rip, and shaq. Easily top three seeds in east again.

Phoenix rebuilds around Amare Stoudemire and gains some youth.

Philly creates a solid core of Rashhed, Billups, and Iguodala.

Milwaukee gains the best backcourt in the NBA with Steve Nash and Michael Redd.
I’m not sure if any of these trades would work, but I just wanted to explore some possibilities. What do you all think?

John answers:

The trade sounds cool on paper but it could never happen due to the money (it is very hard to trade “fairly” in the nba cause of salaries). Milwaukee gains the most because they get Nash to form the best backcourt in the league like you said. Detroit gets the bad end of the deal because Shaq is on the decline due to age and Andre Miller excels more in a run-and-gun type of offense (like in philly and denver, were he played before) than Detroit’s half court offense. Suns don’t gain much now but do get younger for the future. Philly can now compete with the east’s top dogs with Billups and Sheed (they don’t get ther best trade deal out of the other 3 teams though because of Billups/Sheed age)

Maria asks…

how to trade stock futures? i am new to stocks, please help?

John answers:

^That is horrible advice, Sma.

Futures in general are a different kind of animal as opposed to just buying a general stock.

Here’s my suggestion on how you should plan it out:
1) Educate yourself on the mechanics of a futures contract (how it works, how it’s priced, how they’re traded, what brokerages would be best for your situation)
2) Get a paper trading account going…and make it like you’re trading in a real work. Assess why you gained or lost money
3) Repeat step 2 until you’re conforable with your risk level, then start trading.

Here’s a good starting point for stock futures:
http://www.investopedia.com/terms/i/indexfutures.asp#axzz23QsRLszA

George asks…

what are the difference between shares of stocks and futures contract?

can shares of stock be considered as futures contracts?

John answers:

Hello,

You are talking about apples and oranges, two totally opposite types of investments, let me try to clarify:

Generally speaking….

In business and finance, a share (also referred to as equity share) of stock means a share of ownership in a corporation (company). In the plural, stocks is often used as a synonym for shares especially in the United States, but it is less commonly used that way outside of North America.

In finance, a futures contract is a standardized contract, traded on a futures exchange, to buy or sell a specified commodity of standardized quality (which, in many cases, may be such non-traditional “commodities” as foreign currencies, commercial or government paper [e.g., bonds], or “baskets” of corporate equity [“stock indices”] or other financial instruments) at a certain date in the future, at a price (the futures price) determined by the instantaneous equilibrium between the forces of supply and demand among competing buy and sell orders on the exchange at the time of the purchase or sale of the contract. They are contracts to buy or sell at a specific date in the future [1] at a price specified today. The future date is called the delivery date or final settlement date. The official price of the futures contract at the end of a day’s trading session on the exchange is called the settlement price for that day of business on the exchange.

A futures contract gives the holder the obligation to make or take delivery under the terms of the contract, whereas an option grants the buyer the right, but not the obligation, to establish a position previously held by the seller of the option. In other words, the owner of an options contract may exercise the contract, but both parties of a “futures contract” must fulfill the contract on the settlement date. The seller delivers the underlying asset to the buyer, or, if it is a cash-settled futures contract, then cash is transferred from the futures trader who sustained a loss to the one who made a profit. To exit the commitment prior to the settlement date, the holder of a futures position has to offset his/her position by either selling a long position or buying back (covering) a short position, effectively closing out the futures position and its contract obligations.

If you wanted to buy a stock that invested in futures contracts, there are Electronically Exchange Traded Funds or ETFs which you can do this in. A few examples of this are symbols USO and OIL.

Hope this helps.

Joseph asks…

How to know the closing Value of Option Index for a trading Day?

John answers:

I. NSE (as also BSE) allows trading in ‘Futures and Option’ in several Indexes(Pl see Pt. II).

A. Information on open, high, low and other parameters of various indexes is available on its website:

http://www.nseindia.com/index.htm,

b. Please contact a NSE broker about the modus operandi of dealing in futures and options trades.

C. Information about the values of various Indexes is also available in financial news papers, such as, Economic times and Financial Times.

II. Futures & Options – NSE – Information about:

The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the launch of index futures on June 12, 2000. The futures contracts are based on the popular benchmark S&P CNX Nifty Index.

The Exchange introduced trading in Index Options (also based on Nifty) on June 4, 2001. NSE also became the first exchange to launch trading in options on individual securities from July 2, 2001. Futures on individual securities were introduced on November 9, 2001. Futures and Options on individual securities are available on 227 securities stipulated by SEBI.

The Exchange has also introduced trading in Futures and Options contracts based on CNX-IT, BANK NIFTY, and NIFTY MIDCAP 50 indices.

Http://www.nseindia.com/index.htm

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