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Category: Currency Futures

In simple terms, a currency futures contract is a futures contract where you agree to exchange one currency for another, on a specified date at a price that is fixed on the date when the contract is purchased.

Having been around since the 1970s, currency futures are counted as medium to high risk contracts. One thing worth knowing about forex is that they are not traded on a centralized exchange, futures currencies however do and that is an advantage for traders in our opinion. Now, in order to bring down the risk of trading currency futures, one can rely on hedging. This blog archive on currency future lists a number of write-ups on currency futures and hedge funds.

At Cannon Trading, we can help you with all that you need to know about currency futures trading. Our professional team educates and assists you in dealing with tricky trade situations. Please do read the informative articles that have been listed under this category.

Standard and Poor’s 500 Futures

Posted on by Ilan

Standard and Poor’s 500 futures, commonly known as S&P 500 futures or SP500 index futures, are among the most widely traded financial instruments in global markets. These contracts offer exposure to the performance of the S&P 500 index, a benchmark that represents the performance of 500 large-cap U.S. companies. Whether used by institutions for hedging or speculators for profit opportunities, S&P futures play a pivotal role in the financial ecosystem. This detailed exploration delves into the mechanics of the S&P 500 futures contract, its components, trading strategies, and its appeal to various market participants.

What are S&P 500 Futures?

S&P 500 futures are derivatives contracts that derive their value from the S&P 500 index. These contracts allow traders and investors to speculate on or hedge against the future performance of the index. Each S&P 500 futures contract represents a fixed dollar amount multiplied by the current index level. For instance, the standard S&P 500 futures contract has a multiplier of $50, while the micro SP futures contract has a multiplier of $5, making it more accessible to individual investors.

The contracts are traded on regulated exchanges, primarily the Chicago Mercantile Exchange (CME), under the product name E-mini S&P 500 futures and Micro E-mini S&P 500 futures. These products are available for trading nearly 24 hours a day, five days a week, ensuring flexibility for participants across time zones.

How to Trade the S&P 500 Futures Contract

Trading the S&P 500 futures index requires understanding the contract’s specifications and the market dynamics. Here are the steps and considerations for trading:

  1. Understand Contract Specifications:
    • Symbol: ES (E-mini), MES (Micro E-mini)
    • Contract Size: The standard E-mini S&P 500 futures contract represents $50 multiplied by the S&P 500 index level. For the Micro E-mini, it’s $5.
    • Tick Size: Each tick (minimum price movement) is 0.25 index points, equivalent to $12.50 for the E-mini and $1.25 for the Micro E-mini.
    • Expiration: Futures contracts expire quarterly (March, June, September, and December), with traders often rolling over positions to maintain exposure.
  2. Set Up a Futures Trading Account:
    • Open an account with a broker authorized to trade CME-listed products.
    • Ensure the account meets margin requirements for trading S&P futures.
  3. Develop a Trading Strategy:
    • Use fundamental analysis, such as economic indicators and corporate earnings, to anticipate market movements.
    • Employ technical analysis to identify price trends and potential entry and exit points.
  4. Risk Management:
    • Set stop-loss orders to limit potential losses.
    • Understand leverage, as futures trading involves significant exposure relative to the margin required.

Who Trades S&P Futures and Why?

The participants in the S&P 500 futures market are diverse, each with unique motivations. They include institutional investors, individual traders, and high-frequency trading firms.

Institutional Investors: Hedging and Portfolio Management

Institutions such as mutual funds, pension funds, and insurance companies frequently use S&P 500 futures to hedge their equity exposure. Hedging involves taking an opposite position in futures to offset potential losses in a portfolio. For instance, if a portfolio manager expects market volatility or a downturn, they might sell S&P 500 futures contracts. This allows them to lock in the current value of their holdings, reducing the impact of adverse price movements.

Speculators: Profiting from Price Movements

Speculators, including retail traders and hedge funds, are drawn to S&P 500 futures for their liquidity, leverage, and potential profitability. Unlike institutional hedgers, speculators aim to profit from price fluctuations in the S&P futures market. They can go long (buy) if they anticipate a market rally or go short (sell) if they expect a decline. The high liquidity of the S&P 500 futures index ensures minimal slippage, even for large trades, making it an attractive choice for speculative strategies.

Arbitrageurs and Market Makers

Arbitrageurs exploit price discrepancies between S&P 500 futures and the underlying index or related financial products. For example, if the futures price deviates significantly from the index value, arbitrageurs may simultaneously buy the underpriced asset and sell the overpriced one, locking in risk-free profits. Market makers, on the other hand, provide liquidity by quoting buy and sell prices, ensuring smooth market functioning.

Components of the Standard and Poor’s 500 Futures Contract

The S&P 500 futures contract is closely tied to the S&P 500 index, which is composed of 500 large-cap U.S. companies across various sectors. Key components include:

  1. Contract Multiplier:
    • The standard multiplier is $50, while the Micro SP futures use a $5 multiplier, catering to smaller investors.
  2. Index Composition:
    • The S&P 500 index itself includes companies from sectors such as technology, healthcare, financials, and consumer discretionary. Heavyweights like Apple, Microsoft, Amazon, and Alphabet significantly influence the index.
  3. Margin Requirements:
    • Traders must deposit an initial margin to open a position and maintain a maintenance margin to keep the position active. Margins are typically a fraction of the contract value, amplifying leverage.
  4. Settlement:
    • S&P 500 futures settle to the index’s final settlement value on expiration. Traders can close positions before expiry or let them settle financially.

Why Institutions Use Futures for Hedging

Institutions favor S&P 500 futures for hedging due to their efficiency, liquidity, and alignment with broad market benchmarks. Here’s why these contracts are essential tools for risk management:

  1. Portfolio Protection:
    • Institutions use S&P futures to shield their portfolios from market downturns. For instance, during economic uncertainty, selling S&P 500 futures can offset potential losses in equity holdings.
  2. Cost Efficiency:
    • Hedging with futures is often cheaper than liquidating and repurchasing a portfolio, especially for large positions. Futures’ leverage ensures that a smaller upfront capital outlay provides significant market exposure.
  3. Tax and Regulatory Advantages:
    • Futures may offer favorable tax treatment compared to other derivatives or direct stock transactions, depending on jurisdiction. They also help institutions comply with risk management regulations.
  4. Global Exposure:
    • Since S&P 500 futures trade nearly 24/7, they provide round-the-clock exposure to U.S. equity markets, enabling real-time adjustments to risk profiles.

The Appeal of Speculating on the S&P 500 Futures Index

Speculators gravitate toward the S&P futures market for its unique features that cater to active trading strategies:

  1. Leverage:
    • Futures offer significant leverage, allowing speculators to control a large market position with a relatively small capital outlay. This amplifies potential profits, though it also increases risk.
  2. Directional Flexibility:
    • Speculators can easily profit in rising or falling markets by going long or short. This dual-direction capability makes S&P 500 futures versatile for diverse market conditions.
  3. Volatility:
    • Market volatility, often driven by economic data releases, geopolitical events, or earnings reports, creates opportunities for intraday and swing trading.
  4. Accessibility:
    • The introduction of Micro E-mini S&P 500 futures has made the market more accessible to smaller traders, enabling them to participate in the index’s movements without excessive risk.

The Standard and Poor’s 500 futures market is a cornerstone of modern financial markets, serving the diverse needs of institutional hedgers and retail speculators alike. By providing exposure to the broad U.S. equity market, the S&P 500 futures index plays a critical role in risk management, price discovery, and speculative trading.

Institutions rely on the futures SP market for efficient hedging and portfolio protection, while speculators are drawn to its liquidity, leverage, and profit potential. With a detailed understanding of contract specifications, trading strategies, and market dynamics, participants can harness the full potential of the S&P 500 futures contract, whether as Micro SP futures or standard-sized contracts.

For more information, click here.

Ready to start trading futures? Call us at 1(800)454-9572 – Int’l (310)859-9572 (International), or email info@cannontrading.com to speak with one of our experienced, Series-3 licensed futures brokers and begin your futures trading journey with Cannon Trading Company today.

Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Important: Trading commodity futures and options involves a substantial risk of loss. The recommendations contained in this article are opinions only and do not guarantee any profits. This article is for educational purposes. Past performances are not necessarily indicative of future results.

This article has been generated with the help of AI Technology and modified for accuracy and compliance.

Follow us on all socials: @cannontrading

OJ Futures all time highs! + Futures Trading Levels for Oct. 27th

Posted on by Ilan
Get Real Time updates and more on our private FB group!

What you need to know before the close of the trading week:

By Senior Broker, Mark O’Brien

General: 

 

It will likely be challenging to predict the next stage of the Israel/Hamas war in terms of how broadly it draws in other participants.  For now, diplomatic efforts – negotiating for the release of hostages, calls for a cease fire, bringing humanitarian aid to civilians in Gaza – have toned down the severity of the fighting.  Concurrently, Israel is softening up the opposition by bombing of targets thought to be Hamas military strongholds and the markets are anticipating the launch of a ground war.

 

Even with the conflict entering its 20th day and seeing how commodities have already reacted in that time, the start of ground fighting and/or a broadening of participants would likely see sharper moves in particular futures contracts, i.e., gains in energies, flight-to-quality upward movement in gold and the Swiss franc and even food-related commodities like wheat.  Conversely, equity index futures – U.S. and more broadly – will be vulnerable to draw-downs.  Note that the E-mini Nasdaq already fell into correction territory on Wednesday following the latest tech earnings.

 

Financials: 

 

One instrument at a potential cross-roads – it’s current 6-month / ±$11K per contract decline a dominant catalyst for dragging shares around the world to multi-month lows – is the 10-year T-note futures contract.  Its correspondent benchmark yield is hovering at a 15-yr high of 5%.  Already vulnerable to information on the pace of the U.S. economy, the conflict uncertainty poses a new agitator to the market.

 

Crypto:

 

After trading down to 3-year lows below 15,000 last October, on Tuesday, Bitcoin futures traded through 35,000, a 17-month high, a ±$10,000 move for a Micro Bitcoin futures contract (contract size: 1/50 Bitcoin), a ±$100,000 for the “adult” / Bitcoin futures contract (contract size: 5 Bitcoin).

 

Softs: 

 

With new all-time highs being set all year – almost weekly – orange juice futures (basis Nov.) are poised to break through $4.00/lb. (contract size: 15,000 lbs, 1 cent = $150), more than double its ±$1.85 levels in January, a ±$32,000 per contract move.  Florida orange growers harvested their smallest crop in nearly 90 years, the result of an ill-timed freeze, two hurricanes and the citrus psyllid, a tiny invasive winged insect that has spread citrus greening disease and is laying waste to Florida’s groves.

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Plan your trade and trade your plan.

 

 

 

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

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Futures Trading Levels

10-27-2023

#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG
#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG

 

Improve Your Trading Skills

Get access to proprietary indicators and trading methods, consult with an experienced broker
 1-800-454-9572 Explore trading methods. Register Here


Economic Reports, Source: 

Forexfactory.com

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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.

US$ Moving the markets? + Futures Trading Levels for Sept. 28th

Posted on by Ilan
Get Real Time updates and more on our private FB group!

What you need to know for the last two trading days of the month

 By Mark O’Brien, Senior Broker

General: 

 

Thanks in large part to higher yield opportunities, foreign purchases of dollars to buy U.S. treasuries have pushed the U.S. Dollar Index (basis Dec.) to a 10-month high today – trading to an intraday high of 106.24 – a climb of over $7,000 per contract since mid-July.  The Federal Reserve held interest rates steady at their September meeting, but chairman Powell reiterated the Central Bank’s goal of bringing inflation down to its 2% target, so further rate hikes were still on the table and “higher for longer,” remained the clarion call.

 

Currencies: 

 

Conversely, the Euro hit 6-month lows today, down to 1.0538 intraday, marking a ±$9,500 per contract move in a little over two months.  The Japanese yen is threatening its key 150 level, where Japanese officials are seen as potentially intervening to shore up the currency (divide the futures price by 1 to find the conversion rate).

 

Metals: 

 

New highs in the dollar have also translated to new lows in precious metals, particularly gold, which lost ±$29 per ounce today (basis Dec.) and broke through $1,900 per ounce, approaching early-February lows near $1883.  This is a ±$225 per ounce decline (±$22,500 per contract) from its May 4 highs.

 

Energies: 

 

Despite China’s tenuous economy – a key measure of demand for crude oil globally – the supply side of the ledger has been the driving force behind rising energy prices.  Production cuts made by OPEC+ and continuing through year’s end have contributed to a plunge in storage levels in Europe and the U.S. to multi-month lows.  Today the Energy Information Administration reported a crude oil inventory draw of 2.2 million barrels for the week to September 22, spurring a ±$3.50 per barrel advance above $94.00 per barrel intraday (basis Nov.)  Yesterday, the American Petroleum Institute estimated that stocks at the Cushing, Oklahoma hub – where West Texas oil futures deliveries are processed – had slipped to below 22 million barrels, which is on the brink of the minimum operating level for that important terminal.  The crude oil tanks around Cushing have approximately 91 million barrels of storage capacity.

 

Summary: 

 

Futures traders remember the practical rule of thumb to keep an eye on the U.S. dollar.  A stronger dollar in the global market will increase the price of commodities relative to foreign currencies.  The higher price of commodities in foreign currency will work to lower demand and dollar-priced commodities.  For a first-rate overview, check out the piece by Hannah Baldwin with the CME Group and contributed to Reuters: “How a strong dollar affects international currencies & commodities.”

 

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Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

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Futures Trading Levels

09-28-2023

#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG
#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG

 

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Improve Your Trading Skills

Get access to proprietary indicators and trading methods, consult with an experienced broker
 1-800-454-9572 Explore trading methods. Register Here


Economic Reports, Source: 

Forexfactory.com

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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.

Win 1 oz Gold Bar + Trading Levels for 5.17.23

Posted on by Cannon Operations
Get Real Time updates and more on our private FB group!

Are you ready to go for gold?

 

Then here is your golden opportunity. CME Group will be launching the Go for Gold Precious Metals Trading Challenge coming this June.

 

You’ll have the opportunity to practice trading highly liquid Precious Metals products while competing against other traders for the chance to win the grand prize of a 1 oz. bar of gold*.

 

During the challenge, you’ll explore our suite of precious metals contracts and test-drive strategies in a simulated environment. We’ll send you exclusive, daily education materials on precious metals contracts in order for you to feel prepared to trade and confidently compete against your peers.

 

Get ready to strike gold.

 

*Participants will only be eligible to receive a 1 oz. gold bar if permitted in accordance with the applicable laws of their jurisdiction.

START DATE: June 4, 2023

 

END DATE: June 9, 2023

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Plan your trade and trade your plan. 

 

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

Futures Trading Levels

for 05-17-2023

trading levels futures and commodities

Economic Reports, Source: 

Forexfactory.com

 

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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.

Weekly Newsletter #1128: March Wheat Analysis, Trading During Economic Guide & Futures Trading Levels 1.09.2023

Posted on by Ilan

Cannon Futures Weekly Newsletter Issue # 1128

 

Join our private Facebook group for additional insight into trading and the futures markets!

In this issue:
  • Important Notices – Make 2023 great!
  • Trading Resource of the Week – Trading Around Economic Reports FREE COURSE
  • Hot Market of the Week – March Wheat
  • Broker’s Trading System of the Week – CIRUS ST58 EUROFX KASE
  • Trading Levels for Next Week
  • Trading Reports for Next Week

    • Important Notice – New year’s Trading Schedules

Make it a great 2023! Stay disciplined, educate yourself and utilize our FREE valuable resources.
In this “Trading Around Key Economic Reports” FREE Course you will learn:
  • What is GDP?
  • About the Retail Sales Report
  • What is NFP ( non farm payroll) Report?
  • Understanding US housing Data
  • FOMC
  • Understanding Oil Data Report
  • Importance of Consumer Confidence Survey
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      • Hot market of the week is provided by QT Market Center, A swiss army knife charting package that’s not just for Hedgers, Cooperatives and Farmers alike but also for Spread traders, Swing traders and shorter time frame application for intraday traders with a unique proprietary indicator that can be applied to your specific trading needs.
        PriceCounts – Not about where we’ve been , but where we might be going next!

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The PriceCount study is a tool that can help to project the distance of a move in price. The counts are not intended to be an ‘exact’ science but rather offer a target area for the four objectives which are based off the first leg of a move with each subsequent count having a smaller percentage of being achieved. It is normal for the chart to react by correcting or consolidating at an objective and then either resuming its move or reversing trend. Best utilized in conjunction with other technical tools, PriceCounts offer one more way to analyze charts and help to manage your positions and risk. Learn more at www.qtchartoftheday.com
Trading in futures, options, securities, derivatives or OTC products entails significant risks which must be understood prior to trading and may not be appropriate for all investors. Past performance of actual trades or strategies is not necessarily indicative of future results.
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With algorithmic trading systems becoming more prevalent in portfolio diversification, the following system has been selected as the broker’s choice for this week.
PRODUCT
SYSTEM TYPE
Swing
Recommended Cannon Trading Starting Capital
$12,000
COST
USD 90 / monthly
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The performance shown above is hypothetical in that the chart represents returns in a model account. The model account rises or falls by the average single contract profit and loss achieved by clients trading actual money pursuant to the listed system’s trading signals on the appropriate dates (client fills), or if no actual client profit or loss available – by the hypothetical single contract profit and loss of trades generated by the system’s trading signals on that day in real time (real‐time) less slippage, or if no real time profit or loss available – by the hypothetical single contract profit and loss of trades generated by running the system logic backwards on back adjusted data. Please read full disclaimer HERE.
Sign Up for a Free Personalized Consultation with a Broker from Cannon Trading Company
Questions about the markets? trading? platforms? technology? trading systems? Get answers with a complimentary, confidential consultation with a Cannon Trading Company series 3 broker.

  • Trading Levels for Next Week

Daily Levels for January 9th, 2022

Daily 1.09

Weekly Levels

Weekly 1.09

 

  • Trading Reports for Next Week

First Notice (FN), Last trading (LT) Days for the Week:
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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading

Key Points for Real Time Dow-Jones Futures Trading

Posted on by Jenny Collins

Dow Jones Futures Blog

Dow-Jones In Real Time

Providing exposure to 30 of the largest companies in the U.S., the Dow-Jones futures market is directly correlated to the value of the Dow-Jones Industrial Average. Among the most liquid contracts on the exchange, the Dow futures are a favorite for all types of traders. Whether you are a scalper live streaming online, or you’re a position trader placing phone orders, the Dow futures are a diverse landscape with traders participating from all over the world.

Real time quotes are widely available across media outlets, trading platforms, and brokerages. The E-Mini Dow futures(YM) trade on the CBOT as part of the CME Group. Minimum tick size is one point with a value of $5.00 per point, per contract. The notional value of the E-Mini Dow contract can be calculated using the value of the Dow Jones Industrial Average times $5. A smaller alternative, the E-Micro Dow(MYM) contract trades at one-tenth the format of the former, or $0.50 per tick.

The Dow-Jones Advantage

Dow-Jones futures offer competitive margin requirements and leverage, allowing responsible investors and traders the opportunity to hedge larger positions with less capital. For U.S. Traders, the IRS classifies broad based index futures such as the Dow Futures under the 60/40 rule which allows trading profits to be taxed at 60% the more favorable capital gains rate, and only 40% as ordinary income (Check with a CPA before trading.)

As an investment device, the Dow-Jones futures provide real time leveraged exposure to the index value, which promotes capital efficiency for investors and traders.  This means that skilled risk managers, like yourself, will no doubt find competitive and creative solutions to manage risk.

The Dow Jones Futures market is a competitive market for tools and platforms to trade with.  Hence, a plethora of options are available to both retail and professional traders. The Dow-Jones Futures are traded on by many brokerages, software, and platforms, with access to real time data quotes being provided from the exchange through several different data providers.

Dow Jones Futures Live Stream

The Dow-Jones futures market shares a strong correlation to the other U.S. Index futures such as the Nasdaq 100, S&P500, and Russell 2000 contracts. This means that the U.S. markets tend to reflect the movement of one another with additional correlations to the bond markets, currencies, and many other commodities such as gold, silver, etc. Notably, the futures trade nearly 24 hours a day through the week, from Sunday evening until Friday. It’s arguable that if you consider the ease of shorting, capital efficiency, etc. it makes futures a much more valuable tool than ETF’s. Additionally, also  available are the Dow Futures Options contracts which expire monthly. Be sure to understand your risks, and consult with your broker before trading.

Key Points of the Dow-Jones Futures Market

  • Dow-Jones Futures provide leveraged exposure to the DJIA for traders and investors. Take caution when you are approaching a leveraged environment, as the risks can be substantial.
  • Multiple Contract Sizes for different sized investors, traders, and strategies
    • E-Mini(YM) – $5 per point
    • E-Micro(MYM) – $10 per point
  • Profits are taxed more favorably at the 60/40 rate.
  • Trade nearly 24 hours a day, 6 days a week.

You can download one of our trading platforms with live data and the options board here

E-Futures International | Futures Trading Platform & Broker Demo Account (cannontrading.com).

We will be happy to screen share with you and answer any questions you may have about futures related inquiries.

Author: Josh Meyers, Broker at Cannon Trading Company

Important: Trading commodity futures and options involves a substantial risk of loss. Therefore, recommendations contained in this letter are of opinion only and do not guarantee any profits. There is not an actual account trading these recommendations and past performances are not necessarily indicative of future results.

Dow & NASDAQ Futures to Show Pre-Open on Stocks

Posted on by Jenny Collins

Dow NASDAQ Futures

NASDAQ Futures Marketwatch, Investing in futures & CME

When looking at the Dow, NASDAQ, and S&P futures, there are similarities and differences between stock ETF’s and these Futures. Depending on how much leverage you would like to employ, the Futures numbers are below. If you are looking at the futures prices and had questions about the valuations, we have included a quick key below:

Dow futures symbol YM, Stock ETF Equivalent symbol DIA

Nasdaq Futures symbol NQ, Stock ETF Equivalent symbol QQQ

S&P Futures symbol ES,  Stock ETF Equivalent symbol SPY

Notional Value Calculations for Dow NASDAQ S&P Futures

Both Mini and Micro E-Mini (1/10th size of the E-Mini)

Mini Dow futures price X $5 = Notional Value

Micro Emini Dow (MYM) futures price X .50 = Notional Value

Mini Nasdaq 100 futures price X $20.00 = Notional value

Micro E-Mini Nasdaq (MNQ) 100 futures price x $2.00 = Notional value

Mini S&P futures price X $50.00 = Notional Value

Micro E-Mini S&P (MES) Futures price X 5.00 = Notional value

 

If Dow @ 32000 Notional Value of YM = $160,000.00    Margin to hold $ 8800.00

E-Micro    32000 Notional value of MYM = $16,000.00   Margin to hold $ 880.00

If Nasdaq @ 13500.00 Notional Value of NQ = $270,000.00 Margin to hold $16,500.00

E-Micro    13500.00 Notional value of MNQ = $27,000.00 Margin to hold $ 1650.00

If S&P @ 4250.00 Notional value of ES = $212,500.00 Margin to hold $11,800.00

E-Micro   4250.00 Notional value of MES = $21,250.00 Margin to hold $1180.00

 

Dow Nasdaq S&P futures also offer options, Weekly Options for E-Mini S&P 500 Futures | Cannon Trading.

You can download one of our trading platforms with live data and the options board here

E-Futures International | Futures Trading Platform & Broker Demo Account (cannontrading.com).

We will be happy to screen share with you and answer any questions you may have about futures related inquiries.

Author: John Thorpe, Senior Broker at Cannon Trading Company

Important: Trading commodity futures and options involves a substantial risk of loss. Therefore, recommendations contained in this letter are of opinion only and do not guarantee any profits. There is not an actual account trading these recommendations and past performances are not necessarily indicative of future results.

Gold Futures Analysis, Price & Prediction

Posted on by Jenny Collins

Gold Futures Analysis, Price & Prediction

Gold Futures Analysis

Taking a closer look at gold futures analysis, price and prediction, the CME gold futures contract (GC) is one of the most actively traded on the exchange marketplace. Each contract represents 100 troy ounces (see contract for specs) with a tick value of $10 or .10 per ounce. The CME continues to provide accessibility for smaller traders by offering contract sizes such as the Micro gold futures (MGC). Standing at 1/10th the size of the aforementioned, with a tick value of $1, the MGC provides accessibility to those who may size their positions incrementally. Both contracts are actively traded, providing good liquidity to market participants.

Whether the standard applies or not, gold continues to be a popular choice for investors and traders alike. In gold futures analysis, the market participants of gold futures are diverse. People across the world hedging, speculating, and doing business with the hope of a better future. Though volatile at times, gold has a record of recovery after periods of price adversity. Inflationary concerns and looming world conflict have once again sent gold futures careening toward all-time highs. In a time where Bitcoin and other cryptos continue to draw attention from those pursuing extraordinary returns, metal investors seem to have enjoyed relative stability and growth since the COVID-19 crisis. Gold looks poised to once again push upward as investors and traders seek financial solace from the anticipated Russia/Ukraine military conflict.

From a technical analysis perspective, gold appears to be testing the upper side of a price consolidation that’s lasted for nearly a year. Assuming continued strength, one could argue that gold will top $2,000 an ounce this year and possibly make a new all-time high. If conflict materializes and broad-market weakness presents, the negative beta correlation of gold to the S&P500 may create buying pressure.

Price & Prediction

Taking this into consideration, it’s important for traders like you to brace for multiple scenarios when doing a gold futures analysis, with price and prediction. All signs point upward for gold, which means it can be useful to reflect and prepare for something less obvious. Ironically, like a punishment for the preemptive celebration of traders and investors, when things seem a shoo-in, adversity reveals itself. Make a plan for when things don’t go your way. Gold may retest $2,000/ounce and fall back into price consolidation, or reverse and press downward. Any number of scenarios could play out, and only time will tell. You must consider these and more factors when looking at gold futures analysis, price and prediction. Those prepared with reactive risk management solutions, active at finding low risk/high reward trading opportunities will succeed.

Within the gold futures, speculative traders skilled in order flow/tape reading should find intraday opportunities. While swing traders and portfolio-style risk managers may utilize gold futures to hedge or manage their broad market exposure. Directionally focused swing/position trading continues to be viable option for disciplined traders as well. The critical element to success tends to be risk management, regardless of trading style.

Nowadays cryptocurrency has taken the world by storm. Outsized returns and the hope of instant success draw a crowd. It seems an era of new-school vs. old-school, but caution is advised. For millennia our species has valued gold. Bitcoin was created in 2009. It can be argued that the cryptocurrency market is still in its initial price discovery phase. Please consider that strong value can be found outside of what’s considered trendy or popular. It’s ironic that gold seems less glamorous these days. Be sure to do your due diligence, and remember what they say about all that glitters….Happy Trading!

Get More Insights and Sign Up for A Free Demo Here: https://www.cannontrading.com/software/e-futures-international?q

Author: Josh Meyers, Broker at Cannon Trading Company

Important: Trading commodity futures and options involves a substantial risk of loss. Therefore, recommendations contained in this letter are of opinion only and do not guarantee any profits. There is not an actual account trading these recommendations and past performances are not necessarily indicative of future results.

What are Gold Futures?

Posted on by Jenny Collins

What are gold futures ?

What Are Gold Futures?

Like all commodity futures, gold futures are derivative financial contracts.  A derivative is a type of contract whose value is determined by or derived from the value of another asset.  In the case of gold futures contracts, the other asset is an amount of gold.  The major gold futures contracts traded on the CME Group’s COMEX Exchange are derived from the value of 100 ounces, 50 ounces, and 10 ounces of gold with a rated fineness of 995. What this means is the underlying metal’s purity is at least 99.5% or more.  In turn, because of the reflective relationship between gold futures contracts and gold itself, understandably the price of a futures contract is valued similarly to and fluctuates with the price of gold.

The Marketplace Breakdown

Gold futures, such as those traded on the CME Group’s COMEX Exchange, are an efficient means for you as a trader to participate in the directional movement of the price of gold.  The exchange is essentially the marketplace where these futures are traded.  By means of electronic networks, an exchange’s market participants can be apprised of vital information like this futures contract’s current price, competing bids and offers, the number of contracts changing hands (volume), the total number of outstanding contracts (open interest), and more.  It’s also the means by which participation in the gold futures marketplace takes place.  It’s where buyers and sellers, or futures traders like you, meet.

How Do You Begin Trading This Market?

Gaining access to the gold futures market generally calls for a trading account to be opened with a registered brokerage.  It is through this arrangement that market participation is facilitated and orders to buy and sell gold futures can be placed to the exchange via an electronic trading platform – called Globex at the CME.  The exchange is responsible for the execution of trades between buyers and sellers.  This is possibly the most important function of the exchange, in that it serves as the buyer to every seller and the seller to every buyer, thus virtually eliminating credit risk for each market participant.

Get More Insights and Sign Up for A Free Demo Here: https://www.cannontrading.com/software/e-futures-international?q

Author: Mark O’Brien, Senior Broker at Cannon Trading Company

Important: Trading commodity futures and options involves a substantial risk of loss. Therefore, recommendations contained in this letter are of opinion only and do not guarantee any profits. There is not an actual account trading these recommendations and past performances are not necessarily indicative of future results.

Micro Gold Futures

Posted on by Jenny Collins

Micro Gold Futures

Micro Gold Futures: An Overview

Micro gold futures contracts are useful in bearish equity environments, where gold is showing its strength. It can serve as a portfolio stabilizer when markets are stressed. While the metal is not always immune to selling pressure, like when it sold off when the world went into “lockdown mode” in March 2020, it can outperform typical risk assets in these market environments.

With micro gold futures you have a greater ability to pinpoint scale, since the notional value is price times quantity, or 1890.00/oz X 10 Ounces.   You can use them along side the 100 oz gold contract to control $250,000.00 of the metal.  Here’s a great breakdown example of what that might mean for a trader like you:

  • $1890 x 100oz Full Size Gold Contract = $189,000.00 on Notional Value plus $1890 x 30 ounces ( 3 Micro Gold Futures contracts) = $56,700 for a total $245,700.00 Notional Value.   
  • The Margin required for 1 Micro Gold Futures Contract is $660.00 currently and the Full Size Margin at $6600.00 currently, means the good faith deposit to control $245,700.00 of Gold is only $8580.00.

Gold contracts provide global price discovery and opportunities for portfolio diversification by presenting an alternative to gold bullion, coins, and mining stock investments. Gold also offers ongoing trading opportunities, as gold prices respond quickly to political and economic events. Micro gold futures  is 1/10th the size of the standard 100 troy ounce contract but, price action nearly mirrors it’s big brother 100% of the time.

Micro Gold Futures & Standard Gold Futures: A Few Current Technical and Fundamental Thoughts 

  • Gold has been range-bound since April of 2020- $1690.00/oz low and $2089.00 high.
  • This past month has seen the metal rally above it’s midpoint at $1889.50 by a small margin.
  • The market is keeping an eye on a similar set of factors as has been the case for the last several months, namely inflation, the Fed taper, and the timing of “lift off” in US nominal rates.
  • January 2022 saw some increases in managed money net length, perhaps as the headwinds for gold may have been factored into these price levels.
  • February has started very positively, with gold posting gains after key events (FOMC and NFP) and now sitting just below a key resistance level of 1919 USD/oz.

Get More Insights and Sign Up for A Free Demo Here: https://www.cannontrading.com/software/e-futures-international?q

Author: John Thorpe, Senior Broker at Cannon Trading Company

Important: Trading commodity futures and options involves a substantial risk of loss. Therefore, recommendations contained in this letter are of opinion only and do not guarantee any profits. There is not an actual account trading these recommendations and past performances are not necessarily indicative of future results.

RISK DISCLOSURE: Past results are not necessarily indicative of future results. The risk of loss in futures trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.