Quote:
Originally posted by Merlin
This is not really for the individual investor. It is designed more as a way for large commodity producers like miners and farmers as well as large commodity consumers like food manufacturers to manage the price volatilirt associated with production. Yes, you can speculate in this area but it is most definately not recommended. If you want to learn more most books on financial derivatives have large sections on forwards and futures. How they work. How they are quoted. How they are priced. Etc. Read one of those and it will cure you of all your futures curiosity.
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I agree with the two above. Futures aren't for normal people, or even above normal people. Individual speculation is reserved for those who know enough that they wont lose much, or can afford to lose a lot.
I had a professor that made a killing off of futures trading. However, in order to get the account with his broker, he needed to bring in most of the research he has ever done on derivatives (he has 3 PhD's relating to finance).
Only organizations that really use futures are farmer co-ops, large institutions, or companies that have a lot of risk in their specific areas.
LK