Wednesday, November 18, 2009

Commodity Future Online Trading - Understand The Basics

Welcome to the wonderful world of Commodity Future Online Trading. If you are interested in commodity future online trading, there is good news. You have come across a trading market that can be very lucrative and in a short period of time. That's right, commodity future online trading is probably the fastest way to make consistent profits anywhere but before you go out and get involved in this market you better know the basics or you will lose what you have before you know what hit you. Let's take a look at what futures are.

What are Futures?

A futures contract is the obligation to receive or deliver a commodity or financial instrument at a specific date in the future at an agreed upon price today.

These contracts have the following specifications:


Underlying instrument

The commodity, financial instrument, or index upon which the item is based.


Size

The amount of the underlying item covered by the contract.


Delivery or contract cycle

The specified months for which contracts can be traded.


Maturity date

The date by which all particular futures trading month ceases to exist and all obligations must be fulfilled.


Grade/quality specification and delivery locations

A detailed description of the commodity or security and where, when, and how it can be delivered.


Settlement procedures

Rules for physical delivery of the underlying item, including how payments are made and received, or the specific cash series and procedures used for cash settlement of the contract.

Let me close by saying that the basic verbiage and a crude understanding of how commodity future online trading works is not enough. It is important but before you get going I highly recommend that you get a trading coach that is a proven winner. If you are interested, there is a FREE coaching session available through a team of proven and very successful futures traders. Click on the link below and they will set up a FREE coaching session.

If you would like a FREE coaching session with a team of professional traders click on this link http://www.daydaytrading.info

Steve Marhelper has been a successful, active trader for years and has been involved in all forms of investments to include futures, forex, stocks, real estate and others.

Article Source: http://EzineArticles.com/?expert=George_Knoechel

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