Understanding the Benefits of Futures

One of the most important characteristics of any investment portfolio is its diversity. Portfolio diversification helps offset exposure in any single position, and helps investors protect themselves against wide swings in key sectors.

As an equity trader, have you ever been locked out of trading due to a day trading violation? Or have you missed an opportunity due to short selling restrictions?

Liquidity is perhaps one of the most important elements in gauging opportunities in a market. At its core, liquidity is the collective expression of traders' opinions on the market.

All futures contracts have a defined expiration and a specific delivery date. Part of managing your futures position is knowing what to do when your contracts approach expiration.

When we talk about securities margin and futures margin, we are talking about two very different things. Understanding the difference is important.

If you are only an equity trader, when a market is closed and an opportunity arises, you cannot take advantage of it. And worse, if you need to exit a position, you have to wait until the market opens.

Leverage can seem risky, but when used properly it is a game changer. Leverage is the ability to control a large contract value with a relatively small amount of capital.

One thing traders look for is the ability to get in and out of a market efficiently. A tight bid-offer spread makes that possible.

A Globex Request for Quote (RFQ) is an electronic notification sent to all Globex participants to solicit quotes in the central limit order book (CLOB) for a specific strategy or instrument. The sender isn't obligated to show directionality as a buyer or seller, and is not obligated to trade, as the RFQ is simply an indication of interest.