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UPDATE 2-GE Capital launches $5.5 bln FDIC-backed debt sale-IFR
to the market, and prior to this they didn't have access,' said Spencer Lee, head of the trading desk at SCM Advisors in San Francisco. Investors for their part are attracted by the government guarantee. 'Many folks think that it could in fact be a
BRIEF-Servidyne declares quarterly dividend
Financial News warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other
BRIEF-Clearwater Paper adopts stockholders rights plan
Financial News warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other
BRIEF-VMS names CFO
Financial News warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other
BRIEF-National Fuel declares quarterly dividend
Financial News warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other
BRIEF-Chubb approves new share repurchase program
Financial News warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other
Mexico consumer confidence rises in November
Financial News warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other
BRIEF-World Financial declares quarterly distribution
to be relied upon in making (or refraining from making) any specific investment or other decisions. Interactive Investor Trading Limited and its Data Providers do not warrant the accuracy, timeliness or suitability of any information provided above. Such
New York Times Homepage Link-Outs: Right Direction, Wrong Tool
Search jobs by category, get job alerts by email or live feed, apply online Employers: See all recruitment options, get applications online or by email
WRAPUP 2-U.S. layoffs spread, CEOs see more pain ahead
Financial News warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other
Follwing a pattern, stocks stumble at finish line
strong on the heels of Wall Street's gains on Tuesday and Wednesday, but fell lower in afternoon trading in Europe. Major markets in Europe ended the day flat. European banks announced a wave of layoffs, a sign they are paring back to focus on core
US STOCKS SNAPSHOT-Market falls further on energy, autos
Financial News warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other
Bleak 2009 Outlook for US Traditional Media
Search jobs by category, get job alerts by email or live feed, apply online Employers: See all recruitment options, get applications online or by email
BRIEF-Ista Pharma says meets goals in once-daily topical Xibrom trial
to be relied upon in making (or refraining from making) any specific investment or other decisions. Interactive Investor Trading Limited and its Data Providers do not warrant the accuracy, timeliness or suitability of any information provided above. Such
BRIEF-Thoratec announces interim data for Heartmate trial
to be relied upon in making (or refraining from making) any specific investment or other decisions. Interactive Investor Trading Limited and its Data Providers do not warrant the accuracy, timeliness or suitability of any information provided above. Such
UPDATE 3-Starbucks to miss 1st quarter view, cut more costs
in the day, pared their gains after the outlook was announced. They were up 1 percent in afternoon trading. 'We do not expect to meet current consensus estimates for this quarter,' said Starbucks Chief Financial Officer Troy Alstead. In the first nine
Economic blues push crude below $44
delivery fell $3.12, or nearly 7 percent, to $43.67 a barrel at the close of floor trading on the New York Mercantile Exchange. Futures touched $43.51, the lowest since Jan. 6, 2005. Oil prices have tumbled 70 percent since reaching a record $147.27 on
WRAPUP 3-US automakers face skeptical Congress on cash plea
step in under certain circumstances. Shares of GM were down 16 percent to $4.10 in late afternoon trading, while Ford was off 7 percent at $2.64, both on the New York Stock Exchange. (Reporting by John Crawley, Karey Wutkowski and Rachelle Younglai in
Stocks turn negative as investors brace for jobs data
A period of relative calm on Wall Street ended today as stocks tumbled in the final hour of trading on growing investor anxiety about the governments November employment report. The major indexes each fell more than 2.5 percent, including the Dow Jones
Rail Relocation group launches campaign ahead of '09 lege session
During the upcoming 2009 Texas legislative session, the coalition plans to recommend various options for funding that would enable relocation and improvement of freight rail lines around the state. The funding would create a revenue stream that could
BRIEF-Primedia announces share repurchase program
to be relied upon in making (or refraining from making) any specific investment or other decisions. Interactive Investor Trading Limited and its Data Providers do not warrant the accuracy, timeliness or suitability of any information provided above. Such
Chubb says inks new share repurchase plan
statement. Shares were down 2 percent at $47.59 on the New York Stock Exchange in late afternoon trading. (Reporting by Lilla Zuill) Keywords: CHUBB/BUYBACK COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or
NFL Preview - Dallas (8-4) At Pittsburgh (9-3)
as a flex pick. Ward is the best play among the Pittsburgh receivers, with Holmes and Miller decent options at their respective spots. Roethlisberger hasn't been a No. 1 fantasy quarterback this season, however, and should be used only if the
BRIEF-Fidelity Bancorp receives preliminary approval under TARP
to be relied upon in making (or refraining from making) any specific investment or other decisions. Interactive Investor Trading Limited and its Data Providers do not warrant the accuracy, timeliness or suitability of any information provided above. Such
Automakers vow change, plead for aid in Congress
of the Detroit manufacturers. Shares of GM were down 2.9 percent to $4.76 in Thursday morning trading, while Ford was 2.8 percent higher to $2.93, both on the New York Stock Exchange. Rapeseed crop in 2009 to jump on prices, say traders FE - 02
NFL Preview - Atlanta (8-4) At New Orleans (6-6)
hearts of enemy defenses, as Brees (3870 passing yards, 24 TD, 14 INT) has a wealth of talented options at his disposal and a line that excels in keeping him upright. The exceptionally-accurate triggerman has been nearly unstoppable at the Superdome this
Rejecting raise is symbolic, but useful
hope to continue building. Even if it?s mostly symbolism ? the auto executives are also paid in stock options that usually exceed their salaries ? the example is worth emulating. So far, we only have a pledge from the legislative leadership that
Chargers Look To Stop Slide Vs. Raiders
productive day of the year against the Raiders on Thursday night. Rivers and Gates also remain first-rate fantasy options, and against Oakland's sketchy attack, the San Diego defense is a worthwhile play. The Bolts' Nate Kaeding is the only kicker you
BRIEF-Monarch Financial gets preliminary approval under TARP
to be relied upon in making (or refraining from making) any specific investment or other decisions. Interactive Investor Trading Limited and its Data Providers do not warrant the accuracy, timeliness or suitability of any information provided above. Such
Wide Write: Rookie Ryan a No-Brainer
owner about Mike Shanahans unpredictability with running backs, but its not like there are a ton of other options since every available back in the Mountain time zone is injured. Hillis had his best game yet against the Jets last week, notching 129 yards
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Futures Contract Trading
 | 1af9A futures contract has a limited life span. It is also not the cash commodity that is really in play here. Instead, traders use a futures contract for hedging against price fluctuations or to gain some profits from potential variations in the price of commodities. In other words, if you are the buyer of the futures contract, you will agree with the seller to buy the underlying commodity at a set date and at a fixed price. The change in price between the fixed price and the actual price of the underlying commodities, will determine whether you gain profits or suffer losses on your futures contract. The seller and the buyer usually liquidate their respective short and long positions independently before the futures contract expires, and very rarely take delivery of the commodities in play. Fluctuations in futures contract pricing Fluctuations in the price of a futures contract are driven by a variety of different and largely unpredictable factors. Interest rates make the greatest power plays. If you are in a currency futures contract, the policies and activities of the Federal Reserve, U.S. Treasury and foreign central banks, will impact interest rates and then, currency pricing. If you are playing stock indexes, you will find that your futures contract is influenced by anything that influences the stock market in general. Once again, interest rates are a serious factor to consider. If these hike there will some pain in the stock market and pressure on your much hoped for gain. Naturally not only interest has an impact. General economic factors, seasonal influences as well as the expected future pricing of a commodity should all be kept in mind. The price of a futures contract is a great deal more turbulent than that of the average stock on the stock market. A commodity could be upwardly mobile one year and in a downward spiral the next. Nobody who trades in a futures contract can afford to rest on his or her laurels. The commodity trader will (ideally) need to make use of both fundamental analysis and charting, to better predict what the future could hold. Fundamental analysis is a bit of a hard slog: supply and demand need to be closely monitored. If there is greater supply than there is demand, the commodity price will most certainly plunge and if there is too little supply to meet the demand, the futures contract trader could make very good gains from the resultant commodity price increases. Pricing
changes in commodities are generally influenced by fundamentals, natural disasters, poor seasons, politics and perception. You can use charting to find those formations or patterns that pre-empt bullish or bearish shifts. Bar charts make for a simple, yet effective tool for the futures contract trader. It contains information on the particular futures market price movements, volume and open-interest. These commodity charts are compiled daily, weekly and monthly. The historical patterns will abet your efforts to gain a long-term view of the market. You should however also be looking at things like moving averages and oscillators when planning your trades.
Who plays the futures contract game?
As we mentioned earlier in this article, there are two motives for buying futures contracts: One is for hedging commodity price changes and the other for making money out of those inevitable changes. Those who hedge are generally also those who have some sort of a requirement for the underlying commodity. In example, if the commodity is wheat, it may be a miller that is hedging against higher future wheat pricing. The speculator on the other hand, has no interest in the underlying commodity and will buy a futures contract purely to make a quick buck.
Effectively there are two types of futures contract hedges: a long hedge and a short hedge:
Short hedge - Futures are sold, normally by a trader who either owns the underlying commodity or who stands to suffer some sort of a loss if the pricing drops.
Long hedge - Futures are bought, normally by somebody who uses or processes the commodity, because there is concern that the pricing will increase. The trader could sell the futures contract at a later date, potentially for more than he would have to pay the producer at that point in time - and pocket the profits.
The speculators have a role to play here too, albeit that they do not have a natural long or short position. Their sole aim is to buy low and sell high. In the process, they cause the liquidity needed as they frequently take the opposite side of the trade of the hedger.
Advantages of futures contract trading
There are a variety of advantages to be had from in futures contracts:
* Owing to volatility one can potentially make more money sooner from futures contract than from on the stock market if your judgement is sound. If not, you could end up losing more money faster too.
* Futures are highly leveraged investments. You only need to raise a small fraction, between 10% and 15% of the underlying futures contract value as margin, whilst enjoying the full value of the contract as it dips and peaks. The money put up, is a performance bond. A further upside is that there is no interest on the difference between the margin and the full contract value.
* The way in which a futures contract trades, makes it one of the most fair and efficient markets. It takes place publicly by open outcry after all.
* Comparatively low commissions are charged on futures contract trades, and only once a position is liquidated.
* The majority of the commodity markets are liquid and broad. There is quick turnaround on futures contract transactions, and subsequently a smaller chance that adverse market movements will take place between the decision to trade and the execution of the trade.
Ian Jackson
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