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The next lesson in our free futures trading course which covers how to add quotes to the platform window.

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These are quotes compiled from many sources that aren't necessarily meant as truth but rather to spark conversation.

Duration : 2 min 56 sec

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For example, oil futures are quoted at 89.5, which is also around the actual price of oil right now. Is the price quoted for the futures contract just the price of the commodity right now, or is it for a future date, and if so what is the time period used for a standard future?

The spot price may be significantly different than the futures price, and depends on many things, including the grade of oil and the point of delivery.

The futures contract is standardized for one particular grade and point of delivery. The front-month oil contract is currently for January delivery. Oil has a futures contract for each month, for the next 12 months.

The standard time period for each futures contract is 30 days.

In general, individuals are interested only in speculating on the price change of oil, and not interested in taking delivery, nor would we know what to do with 1,000 bbl of oil. As such, time is relatively unimportant.

Producers of oil and refineries use the oil futures to lock in a delivery price at some future date. If an oil producer thought oil prices were going down, he might sell short one Jan futures contract today at $92/bbl, for 1,000 bbl. In the third week of Jan, 2008, this producer could cover his short position and buy one contract back, or deliver his 1,000 bbl of oil for the agreed $92/bbl, regardless of the price of oil at that time.

Alternatively, if this same producer thought oil prices were going down in the longer-term, he could sell short the Sep, 08 contract and have almost one year to deliver or cover.

The futures price quoted in the current futures price, but it is also the delivery price at the end of the contract.

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Cheap auto insurance quotes: Do your utmost to always drive responsibly. It's a good decision to NOT drive at all if you've taken alcohol (even if it's just a sip). Traffic offences that are ociated to drinking invariably make you attract unbearable rates. While alcohol-related traffic offences have very clear and serious repercussions, speeding tickets will also make you pay much more if you accumulate them. You'll be helping yourself if you obey all traffic laws always.

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I bet you are well aware of the existent of FOREX trading nowadays. FOREX market exists wherever one currency is traded for another. FOREX, or Foreign Exchange Market, is generally works as an international currency exchange market. Investors and speculators are allowed to trade currencies from all around the world thru FOREX trading. Major currencies traded nowadays are United States dollars, Australian Dollars, Japanese Yens, British Pounds, Swiss Francs, Canadian Dollars, and the Euro Dollars.
FOREX is a very unique type of trading where traders are buying and selling ‘money’ in the same time. The trades are done in pairs, such as Euro/JPY, USD/CHF, and CAD/USD. It is the world largest trading market where an average of $1.9 trillion trades is done on a daily basis. The turnover rates in FOREX are nearly 30 times larger than the total volume of equity trades in United States.
Despite its large volume of trades done daily, FOREX is relative new to the publics nonetheless. It is only made available to publics in year 1998 where big sized inter-bank units are sliced into smaller pieces and offered to individual traders like you and me. Before that, FOREX is a game only for banks, multi national cooperation, and big currency dealers. Only those with large business size and strong financial background were permitted to trade foreign currencies.
As a matter of fact, large international banks are still the major traders in currency exchange market. Deutsche Bank is one of the top currency traders; along with other major banks like UBS, Citi Group, HSBC, Barclays, J. P. Morgan Chase, Coldman Sachs, ABN Amro, Morgan Stanley, and Merril Lynch; these banks are said to be responsible for more than 70% trades in currency market.
If you are new to FOREX trading, I bet the FOREX quotes will confuse you. USD/JPY 119.8, EUR/JPY 127.95, EUR/USD 1.2385/1.2390, and GBP/USD 1.7360/65 these figures are just too complicated.
While FOREX quotes might looks like Greeks to the new comers, the concept behind of it is simple. Currency quoted in pairs simply means the relative value compare to the other. Always remember, currency listed at first in a FOREX quote has a constant value of 1. If you see USD/JPY 119.8, this means 1 USD (the first currency listed has a constant value of 1) is equal to 119.8 Japanese Yens. The currency USD in our example is known as base currency; while we normally call the currency listed in the second as the counter.
When you are trading FOREX with currency dealer, the FOREX quotes might look a bit different from our previous example. Often, a two-sided quote, consisting of ‘bid’ and ‘ask’ price, is listed when dealing with currency brokers. For example, EUR/USD 1.2385/1.2390: 1.2385 is known as the ‘bid’ price while 1.2390 is commonly known as the ‘ask’ or ‘buy’ price. The ‘bid’ is the price at which you can sell the base currency; while the ‘ask’ is the price at which you can buy the base currency. As you study the numbers, you might realize that the two-sided currency price is quoted against you. Traders are forced to buy the currency in a higher price than the selling one. This is done because FOREX trades are done without any commission chargers. Thru quoting currency ‘bid & ask’ price differently in this way, the currency brokers are manage to make profit without charging their client commission fees directly.
Strategies in FOREX trading: Fundamental analysis and Technical analysis
Fundamental analysis refers to the study of the core underlying elements that influence the economy of a particular entity. As in FOREX trading, government policies, bank policies, natural disasters, and speculators mood are some of the fundamentals considered to predict the currency market trends. Fundamental FOREX traders will review a country economy’s situation base on these fundamental elements and respond accordingly. To gain max, fundamentalists often apply precise method to convert study’s results into accurate entry/exit price indicator.
Instead of reviewing on the fundamental issues, traders from technical side define market movement according to data purely generated from the market. The term ‘Technical’ is applied in all trading fields, from commodity stocks exchange to option trading, from FOREX to futures.
Generally, the purpose of technical analysis is to find potential price reversal or pivotal points. These points basically refer the change of market trends, which then indicates when to enter or exit from the market. It is important to know that as with any other techniques in your trading system, these technical analysis indicators could be used alone or with other indicators. Traders are always recommended to learn more different technical methods to analyze different market data because none of these techniques are 100% accurate and 100% foolproof. Taking example of the ‘price’ data and the ‘time’ data, which are widely used by FOREX trader. There are some techniques consider solely on the ‘price’ factor, while some solely rely on the ‘time’ factor. The fact is if you know both technical methods, you can take both price and time into consideration during estimating market future trends. This will of course then reduce the risks of losing money in FOREX market. Also, it would be wise if traders combine both technical and fundamental techniques when trading FOREX, as a country currency value depends a lot on fundamental variables such as war, change of national leaders, terrorism attacks, as well as natural disasters.
Without a doubt, FOREX is gaining its popularity fast against other kind of trading. No limited market access, no liquidity issues-after market hours, zero commission fees, low capital requirements with high leverage rates, and no restrictions on short selling — FOREX can be very beneficial to a variety of people. Like any other trading business, if you are new to it, best advice you can get is to learn and practice more before you test your ‘wings’. Forex trading course, seminars, eBooks, Internet, papers, all these are helpful to raise your confidence level before you trade with your real hard-earn dollars. Plan your investment wisely by investing first on yourself; you shall get your reward at the end of the road.

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