Why Trade Futures, Not Stocks?

  • Hedge & Protect Stock Portfolios

    Investors use Futures contracts to hedge stock portfolios and protect against downside price movement when global macro environments become “risky” and may affect an individual’s investment positions.

    Going “Short” or selling the market is a unique aspect of derivatives products ie (Futures & Options) that allows the contract holder to benefit from otherwise problematic downward price action in that stock portfolio.

    Profiting directly from falling prices is not possible with traditional stock trading. To “short” the market, derivatives must be used.

  • Leveraged Exposure for Capital Efficiency

    The most common derivatives product is the home mortgage, but few traditionally view it in this way. A buyer puts up a small fraction of the purchase price (down payment) and uses credit/borrowed money to control a much larger asset value.

    Similarly, with a Futures contract, a market participant can control significant amounts of value with a small “margin” deposit, and thereby ties up less capital while benefitting from any appreciation on the whole value.

    In this way, derivatives traders can get far higher returns for money utilized compared to buying a stock/asset outright. Capital efficiency is king.

  • Speculation / Income Generation

    The “money” (financial) markets cycle up and down everyday, even if price is trending in one direction or another for a period of time. There are ALWAYS smaller counter trend movements and then realignments with the larger trend to take advantage of.

    The skilled Futures/derivative trader can capitalize on this ebb and flow like clockwork. Learnable pattern recognition skills, money risk management training and data driven strategies can be leveraged to generate consistent weekly revenue.

    Past performance is never indicative of future results, however properly traded by trained individuals, opportunity far outweighs the often overstated hypothetical risks.

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4 Key Reasons | Volatility. Liquidity. Trendability. Scalability.

  • Nasdaq 100 Futures

    The index for the technology sector is the most volatile symbol we trade. With a standard sized eMini contract having a $20 / point multiplier and regular daily cycle ranges in the hundreds of points, there is no shortage of opportunity throughout any given intra day session.

    Micro sized contracts are also available for beginners or smaller account traders looking to participate with just 10% of the size for $2 per point of movement.

    Pairing the micros with eMini contracts also enable incredible flexibility and precision to scale in and out of positions, or hedge against your primary directional bias when appropriate.

  • Dow Jones 30 Futures

    The “Blue Chip” 30 Stock Index is the select symbol we would trade if we could only watch one market! Fortunately, we have the capacity to monitor and become intimately familiar with multiple.

    The Dow is an amazing market to catch trends on with our primary pattern recognition tools. With a $5 / point multiplier and common intra day cycle fluctuations in excess of 200+ points, opportunity is abundant.

    Despite such favorable volatility and liquidity of this symbol, many traders fail to consistently identify the right income earning opportunities. We believe this to be linked to a lack of discipline, a low risk tolerance and/or sloppy trade mechanics, all of which can be improved through education and training.

  • Brent Crude Oil Futures

    As an excellent energy sector diversifier, we have come to prefer the (CL) symbol for it’s significant volatility and larger $1,000 / point multiplier. Yes, it’s a very large contract!

    Oil often moves independently of the major stock indices and is predominately influenced by global macro variables that can create massive trends.

    With daily ranges of several dollars or more, the opportunity trading this symbol alone equates to thousands of dollars of potential value. Micro contracts are also available for 10% of that exposure offering long term scaling potential that is measured in orders of magnitude.

  • Index Options with ETFs

    For traders who are interested in identifying potential directional Options trades (buying-to-open Calls and Puts), any of the below listed ETF products for the underlying major indices may also be suitable. Check with your tax advisor on their treatment.

    IWM | Russell 2000 (small business)

    SPY | S&P 500 (broader market)

    QQQ | Nasdaq 100 (technology)

    DIA | Dow Jones Industrial (“blue chip”)

Frustrated With Your Performance Patterns? Break The Cycle

DID YOU KNOW? Futures Markets Are Open 23 Hours Per Day, Sunday through Friday. That’s Ultimate Flexibility

 

“We sleep, but the loom of life never stops, and the pattern which was weaving when the sun went down is weaving when it comes up in the morning.”

— Henry Ward Beecher