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There is a misperception among those who perform analysis of items on the ticker that it is a historical record of events as they happened. That is only true for some small trades. If small trades make up a block trade, then they never appear as separate items. Block trades that complete in the day are reported by brokers to the exchanges after the event. ...


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Futures are a derivative market and are zero-sum (for every long futures contract, there is a short futures contract). Therefore, the $200 profit comes from a $200 loss by the person who held the long side of that contract. The idea of borrowing may be a red herring. If you sell a future, you don't exactly borrow the underlying (here, IBM shares), but you ...


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A futures contract trades at many different prices over its lifetime. Each of those prices corresponds to a different "agreement" to buy and sell the underlying. Futures trading requires margin funds (collateral) from both parties to back up the "agreement". Futures are marked to market: If the market moves against your position, you have to put up more ...


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I dabbled in futures a long time ago so I'll limit my chatter to options, which I have utilized for 30+ years. It's impossible to answer your question succinctly because there are a myriad of ways to trade options. You can be long or short. You can gamble aggressively with them and you can use them conservatively for income, as well as multiple ...


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This is why I trade options. Leverage. When I look at a stock that I feel (no guarantees, of course) is about to have a run up, options are the way to get the most leverage. I saw a potential 50% increase in this stock, and the typical investor might consider buying some on margin. 100 shares, $15000 cost, $7500 out of pocket. Stock rises to $210, a $6000 ...


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The forward price on initial date corresponds to the initial price of the strategy that gives this payoff at times T. So here is the strategy: You buy the asset at time 0. It costs S0. You sell a bond with nominal K*B0. At maturity, you will pay K. At initial time, the strategy value is S0-K*B0. At maturity date, the strategy value will be your payoff ST-...


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With an equity trade, transfer of title occurs between the parties of the trade. Settlement involves not only the transfer of shares between counter parties but ownership is also recorded on the share register via a transfer agent. An option trade involves a contract created between a buyer and a seller. There is no transfer of title via a transfer agent, ...


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When you sell the futures contract, the contract basically says that, if you hold it to the contract date, you promise to sell whatever is being contracted for at the specified price. If you buy the contract and hold to that date, then you promise to buy. So being long or short on a future means exactly what the terms would suggest, that you are going to ...


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According to https://www.quora.com/How-does-one-calculate-returns-on-a-futures-contract/answer/Joe-Fallico the formula should be: (price today - price yesterday) x dollar equivalent for a price move of one tick return = -------------------------------------------------------------------------------- margin requirement per contract


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Well firstly I've know many professional investors (hedge fund portfolio managers) who traded forex, futures and options who knew little about stocks. Some benefits of trading futures, forex and options are that they can be very liquid (but not always), and give easy access to leverage. Getting leverage for stock trading requires loans of some kind and that ...


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With contango, a long-term futures contract will decline to the spot price as the time winds down. So an advantageous position would be to hold the sell-side of a long-term futures contract while also holding the physical commodity. And here storage of the physical commodity is the effective business practice. With backwardation, a long-term futures ...


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First note that the total and non-reportable numbers agree between the two linked reports. The difference arises when we look at how the two reports break down the market participants into categories. The tradester legacy report breaks down the numbers into only two categories - commercial and non-commercial - while the CFTC report uses a more detailed ...


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An option contract is an agreement between two parties to buy/sell a predetermined number of shares of an underlying security at a given price (strike price) by a certain date (expiration). Call buyers have the right to buy the security at the contract terms and call sellers have the obligation to sell the security at the strike price. Put buyers ...


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Many exchanges create contracts in the hope that one day someone might trade them. Until someone does, there are no prices. All the palm oil futures trading happens in Malaysia, and there is no compelling reason (so far) for anyone to trade it on the CME instead. Remember that, even if the monetary terms might be identical, the contracts on the two ...


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I no longer know much about futures but open interest is the same in both the futures and options markets. Open interest represents the number of contracts that exist on any given day. There are 4 scenarios: (1) BTO and STO = Both parties are initiating a new position (one new buyer and one new seller) so open interest increases by one contract (2) ...


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There is no provider, its from the exchange. Its not likely to be the exchange, they don't make mistakes often. I suspect that what is happening is that there are no trades on those contracts for that day. The open is yesterday's close (or something similar), and they have chosen to show the open as the low (presumably because the entire strip is going ...


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The main difference with futures is the only time cash is exchanged is at settlement. Instead of buying stock and hoping it will go up in value, you buy a future, which means that you agree to buy the stock as a certain price at some point in the future. If the underlying stock rises above the futures price, you can buy the stock at that price and ...


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When you buy or sell anything, what you are actually always doing is finding someone, giving one thing, and receiving from them something else OR you enter into an agreement with that person. Without getting into details, while you do indeed have to find someone else to 'sell you a futures contract' (there has to be someone connected to the exchange that is ...


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