Trading futures–as with any trading–involves risk.

      A futures contract is a legally enforceable agreement to make or take a delivery of a specific quantity and grade of a particular commodity during a designated delivery period. Making a delivery is a “short” position, while taking a delivery is considered “long”. The designated delivery period is also referred to as the “contract month”.

      Whether you are “long” or “short", you may close out your position before the contract’s expiration–in fact, almost 97% of all futures positions are liquidated before delivery.

      Each commodity has different expiration months, though the most common are March, June, September, and December. It is rare for futures products to trade every calendar month, so it is important to note the cycle and expiration dates of your chosen product before executing your trades.

      It’s true that any kind of trading, futures included, involves some amount of risk. It’s possible to lost a large sum on money in a short period of time. The amount you could lose is even potentially unlimited, and therefore could exceed what you originally deposited. Why?

      The reason is because trading is highly leveraged, with a small amount of money used to establish a position in assets having a much greater value. But, while trading futures is associated with risk, and it’s important to be cognizant of that risk, it also promises a potential for unlimited income, and therein lies the reason for the risk. The key is balancing the two (and trading education always, always, always helps).

      If you are new to futures trading, check out the FAQ video below which addresses the impact of leverage on margin requirements and reviews steps to help you identify a risk tolerance level that fits your trading style.


      Copyright © 2017 - NinjaTrader™. All rights reserved. NinjaTrader™ is a Registered Trademark of NinjaTrader™, LLC.

      Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. View Full Risk Disclosure.

      Risk Disclosure | Privacy Policy