- How long does it take to open a new account?
- I have heard about people becoming millionaires on small amounts of capital in futures, is that true?
- How do I start?
- How much time do I have to spend each day if I trade futures?
- I have heard that it is possible to lose my entire futures investment, is that true?
- Are the futures markets financially sound?
How long does it take to open a new account?
Your account is typically approved and opened within 24 hours once we've received and have approved your signed application.
I have heard about people becoming millionaires on small amounts of capital in futures, is that true?
Yes, absolutely, although not as common as they might seem. The potential for large profits is inherent in the futures markets; however, when there is an opportunity for large profits, there is also a corresponding risk of loss potential.
How do I start?
Start by "paper trading." Choose something that you are familiar with, or are interested in, and start following that market. It might be something from your business or home. Paper trading is great for gaining an understanding of the mechanics of the trading and the markets, learning terminology, and testing specific trading idea. Don't be in a hurry to trade - wait until you're ready. The markets and the profit opportunities they present will always be there tomorrow..
How much time do I have to spend each day if I trade futures?
Trading futures can take from no time to several hours, depending on the depth of your involvement. Your full service broker will do much of the time consuming work for you. Professionally managed accounts basically require no time.
I have heard that it is possible to lose my entire futures investment, is that true?
Yes, it does happen; however, it is usually because the investor tries to make a killing and exposes himself to considerable risk, more risk than the investor is in a position to handle. Like any business transaction, the futures markets can be approached with reckless abandon, or with common sense and good business judgment.
Are the futures markets financially sound?
Absolutely! The Clearing Corporations of the various commodity exchanges guarantee every transaction on their exchanges. The Clearing Corporation is separate and independent from the exchange. No Clearing Corporation has ever defaulted on any contract. The Clearing Corporation interposes itself as a guarantor of every contract, acting as a buyer to every seller and seller to every buyer. This establishes the Clearing Corporation as the payment and collection agency for its members and, through them, their customers.
Each clearing firm must pay the Clearing Corporation in full for each day's market activity before the market opens for the next trading day. Based on the previous day's settlement prices, payments are made by wire transfer.
Each clearing firm begins each new day of operation without debt to the Clearing Corporation. In this way, debt exposure is limited. Clearing firms, in turn, collect and pay (credit) their customers daily.
This is how the Clearing Corporation effectively guarantees performance of every cleared contract. Their obligations are backed by guaranteed funds deposited by the clearing firms, by the Clearing Corporation's own capital, and by its power to make assessments on its clearing firms. In addition, Federal Regulations require customers' margin funds to be segregated from the other assets of any firm licensed as a futures broker.