What is Futures trading? Essentially, when you trade futures it adds the dimension of time to investing. Whether your chosen instrument is traditional commodities or E-mini index funds, futures trading strategies allow you to speculate about what an asset will be worth at a specific point in the future — thus increasing the scenarios in which a trained investor can reap dramatic profits. How to trade futures in all the leading categories :
• Equity Index Futures
• Treasury Futures
• Energy and Metal Futures
• Commodity Futures
• Forex Futures
Impressive leverage is one reason that futures trading appeals to investors who want to control significant assets for a small amount of capital. It's typical to be able to control $10 in futures contracts with every $1 in your brokerage account. (Of course, you need to satisfy your broker's margin requirements and be aware that leveraged trading involves significant risk as well as potential reward.)
Another benefit is the tax advantage. The government is eager to encourage the healthy activity that futures trading brings to the marketplace. Thus, futures profits get favorable tax treatment with the first 60% of your profits taxed as long term gains, regardless of when they are realized. (This certainly makes sense because a tax-motivated trade would be contradictory to the smooth flow of commodities trading.) And with the maximum tax rate now at 15% for long term gains vs. 28% for short term gains, here's yet another way your potential gains are increased when you trade futures.
A final benefit is that futures is a highly regulated marketplace — built for commodities traders while open to speculators. In general, broker fees are transparent and services consistent from one broker to another. And small as well as large traders can be confident of fair treatment.
Add the flexibility and convenience of today's electronic futures exchanges for round-the-clock transactions, and you can see why this ancient form of trading is appealing to today's most sophisticated investors.