Jack D. Schwager, director of Futures Research and Trading Strategy at Prudential Bache Securities in New York has written a very popular book based on research and interviews with successful traders in an effort to find out what they are doing right. In Market Wizards: Interviews with Top Traders, Schwager found that despite the fact that the approach in trading styles varies dramatically between types of traders, there were some features of trading which were common to all.

It is in Schwager’s book that one finds the tales of extraordinary investment performance which encourage many investors to join in the futures markets. Schwager tells of a trader, Read more »

Posted: February 3rd, 2008 under Future Fund, Futures Market.
Comments: 3

What Futures Contracts Are

Futures contracts are promises; the person who initially sells the contract promises to deliver a quantity of a standardized commodity to a designated delivery point during a certain month, called the delivery month. The other party to the trade promises to pay a predetermined price for the goods upon delivery. The person who promises to buy is said to be long; the person who promises to deliver is short.’ Read more »

Posted: February 3rd, 2008 under Futures Contracts, Futures Market.
Comments: 4

If you understand the basic principles of hedging and speculating, you will have no trouble applying those concepts to futures contracts on foreign currencies.

Hedging and Speculating with Foreign Currency Futures

We have seen that with the appropriate hedging strategy, farmers can reduce price risk. In the world of international business, another significant risk is foreign exchange risk, or the risk of loss due to shifting relative values in national currencies. The next two chapters will discuss how the futures market enables a portfolio manager to minimize market risk and how bankers can reduce the interest rate risk they face. Read more »

Posted: February 3rd, 2008 under Currency Futures, Futures Contracts, Futures Market, Futures Prices.
Comments: 4