Market Prep: Last Trading Day of February, March Bitcoin, PCE Report & Key Trading Checklist

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Different Markets for Day Trading, March Bitcoin

bitcoin

March Bitcoin:

Tomorrow is the last trading day for February. Last and first trading days of the months can at times be more volatile and at times have a chance to become a trending day.

Also tomorrow is PCE ( Personal Consumption Expenditures, an inflation indicator watched closely by the market).

Last but not least if you are trading bonds and ten years, time to trade the June contract.

Day Trading

Trader’s Check List:

·        Review prior day statement

·        Check for any working orders on your platforms.

·        Be aware of contract rollover dates

·        Set a daily loss limit and learn NOT to overtrade

·        Understand what reports are coming out today

·        Make sure you are not distracted

·        Calculate appropriate trading size based on current volatility and account size

·        Start with Larger Time Frame charts to get proper perspective

·        Understand what your goal is

·        Measure your success or lack of

·        Spend time furthering your trading education and exploring different methods

·        Put trading in perspective and make sure the overall psychology of trading fits you.

 

 

 

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March Bitcoin

The rally in March bitcoin ran out of momentum, leaving behind an interim top in December. Now, on the correction lower, the chart has activated downside PriceCount objectives. The first count has been completed. IF you can sustain further weakness, the second count would project a possible slide to the 76,000 area..

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Daily Levels for February 28th, 2025

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Economic Reports

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All times are Eastern Time (New York)

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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.

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Treasury Bonds & Notes make Bold Moves!

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Treasury Bonds Notes
Treasury Bonds

 

Treasury Bonds, Notes

Treasury Bonds & Notes – Different market, different trading environments

Each market has different personality, different behavior along with different times of the day when it is most active. If you are finding that the ES (mini SP) is not giving you enough risk/opportunities, then start monitoring a couple of other markets and perhaps explore them in demo / simulated mode.

There are more than a few markets I think are suitable for day-trading. Below you will find some observations, tips along with what is unique about these markets, personality and most active trading hours.

Interest rates, mostly the ten year and 30-year.

In most platforms, the symbols are ZB for 30-year bonds and ZN for 10-year notes.

Product Symbol

ZB

Treasury Bonds

Contract Size

The unit of trading shall be U.S. Treasury Bonds having a face value at maturity of one hundred thousand dollars ($100,000) or multiples thereof

Price Quotation

Points ($1,000) and 1/32 of a point. For example, 134-16 represents 134 16/32. Par is on the basis of 100 points.

Product Symbol

ZN

Underlying Unit

One U.S. Treasury note having a face value at maturity of $100,000 < Treasury Bond.

Price Quote

Points ($1,000) and halves of 1/32 of a point. For example, 126-16 represents 126 16/32 and 126-165 represents 126 16.5/32. Par is on the basis of 100 points.

Tick Size

(minimum fluctuation)

One-half of one thirty-second (1/32) of one point ($15.625, rounded up to the nearest cent per contract), except for intermonth spreads, where the minimum price fluctuation shall be one-quarter of one thirty-second of one point ($7.8125 per contract).

Contract Months

The first five consecutive contracts in the March, June, September, and December quarterly cycle.

These contracts are often affected by many of the economic reports that come out at 8:30 Am Eastern and there is very active volume between the hours of 8 am EST and 3 PM EST

Volume on both contracts is very good. Ten years will often have 1 million contracts traded per day (might be the second most active US futures market after the mini SP 500) and the bonds will avg. around 1,300,000 contracts.

These markets can experience very volatile movements during and right after different reports but then will often trade smooth or in an intraday trend the rest of the day.

Another advantage for these markets is that the exchange fees per trade are LOWER than the ones on the stock index futures.

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May Sugar Chart for your review below!

May sugar is completing its second upside PriceCount objective to the 19.96 area. It would be normal to get a near term reaction from this level in the form of a consolidation or corrective trade. At this point, if the chart can sustain further strength, the third count would project a possible run to the 21.57 area which is consistent with a challenge of the fall highs.

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Daily Levels for February 25th, 2025

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Economic Reports

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All times are Eastern Time (New York)

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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.

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Natural Gas & Copper Eye Upside Amid Post-Holiday Market Turbulence; Softs & Metals Lead the Charge

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Busy Friday to Finish a Short Trading Week

By Ilan Levy-Mayer, VP

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It has been a volatile short trading week post President’s Day long weekend.

Wild swings across the board with softs and metals leading the way.

Tomorrow we have new home sales, flash PMI and University of Michigan reports which will be watched closely for the inflation outlook.

Watch both natural gas and copper as these markets are establishing a tend to the upside.

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Daily Updates & Market Research

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Daily Levels for February 21st, 2025

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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.

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Corn Futures Contract

The corn futures contract remains one of the most actively traded agricultural commodities in the futures markets. As global demand for corn continues to rise due to its essential role in food production, animal feed, and ethanol production, futures traders seeking profitable opportunities often turn to corn futures as a key component of their portfolio.

10 Essential Tips for Trading Corn Futures in 2025

  1. Understand Supply and Demand Dynamics
    Corn prices are highly sensitive to global supply and demand. Factors such as droughts, floods, and geopolitical trade policies can drastically affect supply, while increased biofuel production and livestock feed demand can drive prices higher.
  2. Monitor USDA Reports
    The United States Department of Agriculture (USDA) publishes reports such as the World Agricultural Supply and Demand Estimates (WASDE), Crop Progress Reports, and Grain Stocks Reports. These provide valuable insights into corn production, yield forecasts, and potential price movements.
  3. Follow Seasonal Trends
    Historically, corn futures contracts tend to follow seasonal price patterns. Prices often drop during harvest (September-November) when supply increases and rise in the planting months (April-May) when weather concerns create uncertainty.
  4. Choose a Reliable Futures Broker
    Working with a reputable futures trading broker is essential for executing trades efficiently. Firms like Cannon Trading Company offer a wide selection of futures trading platforms and have a solid track record with 5-star ratings on TrustPilot, making them a great choice for traders of all levels.
  5. Hedge Against Price Volatility
    Agribusinesses and institutional investors often use corn futures contracts to hedge against price fluctuations. Understanding how to use these contracts for risk management can provide a strategic edge.
  6. Utilize Technical and Fundamental Analysis
    Successful futures traders rely on both technical indicators (such as moving averages and Fibonacci retracements) and fundamental analysis (such as crop reports and geopolitical news) to make informed decisions.
  7. Watch for Inflation and Interest Rate Trends
    Economic factors such as inflation and interest rates influence the overall commodity markets. Rising interest rates can strengthen the U.S. dollar, making corn exports more expensive and potentially lowering demand.
  8. Stay Updated on Trade Agreements
    Global trade agreements and tariffs, particularly between the U.S., China, and the European Union, significantly impact corn prices. Keeping track of new trade deals is crucial for trading futures successfully.
  9. Consider Algorithmic and Automated Trading
    Advanced trading technology has made futures contract trading more accessible through algorithmic and automated trading strategies. Platforms offered by Cannon Trading Company enable traders to execute trades with precision and speed.
  10. Diversify with Other Agricultural Futures
    While trading futures in corn can be profitable, diversifying with soybean, wheat, and other crop futures can reduce risk and enhance overall portfolio stability.

Expected Trends for Corn Futures in 2025

Climate Change and Weather Volatility

Extreme weather conditions are expected to continue affecting global corn production. Unpredictable droughts and flooding could lead to significant price swings in corn futures contracts.

Biofuel and Ethanol Demand

The global push for renewable energy sources will likely keep ethanol demand high, increasing the need for corn as a primary biofuel ingredient.

Rising Input Costs

Fertilizer and transportation costs have been climbing, impacting production expenses and potentially pushing corn prices higher in 2025.

Geopolitical Tensions and Trade Policies

The U.S.-China trade relationship remains a key factor. Tariffs or trade barriers could significantly impact corn exports and futures prices.

Key Reports to Monitor for Corn Futures Trading

  • USDA WASDE Report – Offers supply and demand projections.
  • Grain Stocks Report – Provides insights into corn inventory levels.
  • Crop Progress Report – Tracks planting and harvesting progress.
  • CFTC Commitment of Traders Report – Shows market sentiment among traders.
  • EIA Ethanol Production Report – Measures ethanol demand, affecting corn consumption.

Historical Performance of Corn Futures and Agricultural Commodities

Historically, corn futures contracts have shown cyclical patterns influenced by weather conditions, government policies, and technological advancements in agriculture. The 2012 drought, for example, caused record-high prices, while increased yields in the following years led to price stabilization. Other crop futures contracts, such as wheat and soybeans, have followed similar trends, often correlating with corn prices due to their shared agricultural and economic factors.

Why Choose Cannon Trading Company for Futures Trading?

For traders looking to engage in futures contract trading, selecting a reputable futures trading broker is essential. Cannon Trading Company stands out for several reasons:

  • Top-Performing Trading Platforms: Offering a range of advanced platforms for both beginner and experienced futures traders.
  • Decades of Experience: With a long history in the futures trading industry, Cannon Trading provides expert guidance.
  • Outstanding Customer Support: Rated 5 out of 5 stars on TrustPilot, the firm is recognized for its commitment to client satisfaction.
  • Regulatory Compliance: Fully compliant with NFA regulations, ensuring transparency and security for trading futures.

The corn futures contract presents numerous opportunities for profit in 2025. By staying informed on market trends, monitoring key reports, and partnering with a reputable futures trading broker like Cannon Trading Company, traders can navigate the complexities of futures contract trading with confidence.

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.

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Dollar Index Eyes 105.47 as Economic and Geopolitical Risks Mount

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dollar index

Movers & Shakers by John Thorpe, Senior Broker

Dollar Index Eyes 105.47

Movers and Shakers : QUIET Econ data and fed speak tomorrow

Market volatility is here to stay for the foreseeable future

Choose your opportunities wisely.

Updated: February 18, 2025 2:01 pm

Russia – Ukraine War Update

–Ukraine’s military said Russia launched a barrage of 147 attack drones against Ukraine overnight. Out of this, the Ukrainian Air Force reported shooting down 83, while 59 did not reach their targets. Several storage facilities and private residences were reported damaged.

–The Caspian Pipeline Consortium said that Ukrainian drones hit one of its major oil pipelines in southern Russia’s Kropotkinskaya pumping station in the Krasnodar region, affecting supply from neighbouring Kazakhstan.

–Ukraine’s Security Service claimed responsibility for the attack on the oil pipeline and said that Moscow’s Ilsky oil refinery in Krasnodar was also hit, with at least 20 explosions heard in the area.

–Russia’s Defence Ministry said its forces captured the settlement of Fyholivka in eastern Ukraine’s Kharkiv region. A second announcement later said that the village of Sverdlikovo in Russia’s Kursk region was taken back from Ukraine’s forces.

–US Secretary of State Marco Rubio travelled to Saudi Arabia in advance of planned peace talks between United States and Russian officials over the war in Ukraine.

–Kremlin spokesperson Dmitry Peskov confirmed that Russia would be represented by Foreign Minister Sergey Lavrov and foreign policy director Yuri Ushakov at the meetings with the US in Riyadh.

–Peskov also said that Russian officials would talk with US counterparts about restoring ties, negotiating a peaceful settlement to the war in Ukraine and preparing a meeting between Russian President Vladimir Putin and US President Donald Trump.

 

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–The Kremlin said any plans to deploy European peacekeeping troops after Kyiv and Moscow strike a peace deal would make the matter complex.

–French President Emmanuel Macron hosted an emergency meeting with leaders from key European Union nations at the Elysee Palace in Paris to discuss the EU’s reaction to Washington’s peace talks with Moscow.

–Hungary’s Foreign Minister Peter Szijjarto told a media briefing that the Paris meeting, to discuss the US’s policy shift towards Moscow in its war on Ukraine, would be an attempt to prevent peace. -unlike them, we support Donald Trump’s ambitions; unlike them, we support the US-Russian negotiations; unlike them, we want peace in Ukraine,- Szijjarto said.

–Russia’s Lavrov asked why Europe should be invited to join talks on a peace settlement in Ukraine if European politicians want the war to carry on. He also said Russia would not even consider territorial concessions to Ukraine in future peace talks.

–The spokesperson for Ukrainian President Volodymyr Zelenskyy, Sergii Nykyforov, said that the Ukrainian leader would travel to Saudi Arabia on a long-planned visit the day after the meeting between Russia and US officials wraps up.

–The Ukrainian leader also said he would not recognise any outcome of the Washington-Moscow talks in Saudi Arabia that did not involve Kyiv.

–Zelenskyy met with the United Arab Emirates’s Sheikh Mohamed bin Zayed Al Nahyan during a visit to the UAE, where Sheikh Mohammed reportedly committed to supporting efforts for a peaceful resolution to the war and continuing initiatives to ease the humanitarian impact.

–Zelenskyy is now in Turkiye to meet with President Recep Tayyip Erdogan to discuss prisoner exchanges between Ukraine and Russia.

-The Dollar Index Eyes 105.47.

 

 

 

Tomorrow:

  • FOMC Minutes
  • Housing Starts
  • NO Crude Oil Numbers ( pushed to Thursday)
March US Dollar Index

The March dollar index negated its original downside PriceCounts off the January high early this month. Now, the chart has activated fresh counts off the larrger leg where the first count projects a run to the 105.47 area. It would take a trade below the November reactionary low to formally negarte the remaining unmet upside objectives.

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Daily Levels for February 19th, 2025

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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.

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President’s Day, Natural Gas, & Market Moves: Key Trading Levels & Insights

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Cannon Futures Weekly Letter

In Today’s Issue #1230

  • President’s Day Modified trading Schedule
  • The Week Ahead – FOMC minutes, Housing Starts
  • Futures 102 – Options Strategies
  • Hot Market of the Week – March Natural Gas
  • Broker’s Trading System of the Week – ES intraday System
  • Trading Levels for Next Week
  • Trading Reports for Next Week

natural gas

President’s Day Modified Trading Schedule:

Natural Gas Hot Market of the Week + Monday, February 17th is Presidents Day here in the US.

Many markets will close at noon central and some markets are closed.

Click Here for Full Schedule

PRES DAY 2025 2

Important Notices: The Week Ahead

By John Thorpe, Senior Broker

 

Earnings Next Week:

  • Mon. President’s day
  • Tue. quiet
  • Wed. quiet
  • Thu. WMT
  • Fri. quiet

 

 

FED SPEECHES:

  • Mon Quiet
  • Tues. Quiet
  • Wed. FOMC Minutes pm CST
  • Thu. Goolsbee 8:35 am CST
  • Fri. Quiet

 

Economic Data week:

  • Mon. Presidents Day
  • Tue. Empire state Manu. Index, NAHB Housing index
  • Wed. Bldg. Permits, Housing starts, FOMC Minutes
  • Thur. Initial Jobless Claims, Philly Fed, CB Leading Index
  • Fri. SP PMI, Existing Home sales, Mich. Consumer sentiment

Futures 102: Options Strategies

Course Overview

Option Strategies are an integral part of a trader’s routine. Learn about common option strategies utilized by traders that express their view of market direction and expected volatility. Some option strategies are designed to mitigate risk while others are designed to profit by accepting risk.

Start Now

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Hot Market of the Week

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.

Free Trial Available

March Natural Gas

March Natural Gas is attempting to resume its rally as it challenges the January high. At this point, new sustained highs would project a potential run to the low percentage fourth upside PriceCount objective to the 4.06 area.

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.

Brokers Trading System of the Week

With algorithmic trading systems becoming more prevalent in portfolio diversification, the following system has been selected as the broker’s choice for this month.

ES NZL

PRODUCT

Mini SP500

 

SYSTEM TYPE

Day Trading

 

Recommended Cannon Trading Starting Capital

$36,000

 

COST

USD 199 / monthly

 

Get Started

 

Learn More

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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.

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Trading Levels for Next Week

Daily Levels for February 17/18, 2025

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Trading Reports for Next Week

First Notice (FN), Last trading (LT) Days for the Week:

www.mrci.com

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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.

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Hidden Market Trends: Copper Joins Coffee and Gold in Notable Moves

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Coffee Anyone? Gold? Copper?

COFFEE

 

While most day traders focus on markets like mini SP, MICRO NQ, bonds and few others, some of the other markets have made some noticeable moves. Coffee, Gold and now Copper.

 

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March copper is activating upside PriceCount objectives off the January lows. The first count projects a possible run to the 4.80 area which is consistent with a challenge of the fall high.

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Daily Levels for February 11th, 2025

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Economic Reports

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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.

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Market Movers This Week: Options on Futures, Grains, Hedging, Powell Testimony, CPI & PPI, WASDE, and Earnings Reports

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Cannon Futures Weekly Letter

In Today’s Issue #1229

  • 1099’s Are Available
  • The Week Ahead –
  • Futures 102 – Hedging With grains, Options on Futures
  • Hot Market of the Week – April Hogs
  • Broker’s Trading System of the Week – ES intraday System
  • Trading Levels for Next Week
  • Trading Reports for Next Week

1099’s:

1099 forms will be generated for all futures trading accounts held by US clients that placed any trades during the 2024 calendar year. Traders should expect to receive their 1099 forms via mail, email or through their portal in early February.

 

·    1099 forms will be provided directly from the FCM to the client.

·    To login and retrieve your 1099 for your Cannon account via StoneX click here

·    To login and retrieve your 1099 for your Cannon account via Ironbeam click here

·    To login and retrieve your 1099 for your Cannon account via Dorman click here

For any other FCM’s please contact your broker directly.

Important Notices: The Week Ahead

By John Thorpe, Senior Broker

 

Humphrey Hawkins Testimony week, Fed Chair Powell gives testimony to the Senate Banking Committee beginning @ 9:00 am CST Tuesday the 11th, Wednesday he walks over to the House Financial Committee and answers questions for the congressional body. CPI,PPI! WASDE week! + 5Fed Speakers, 1000’s of midcaps reporting past earnings and future guidance.

Economic releases are relatively light this week with one exception: Consumer Price Index (CPI) pre-market Friday. The Fed Speakers will be at the podium for the foreseeable future as we don’t have another Fed rate decision until late March.

 

Earnings Next Week:

  • Mon. McDonalds
  • Tue. Coca-Cola, Softbank
  • Wed. Cisco
  • Thu.  Applied materials
  • Fri. Quiet

 

 

FED SPEECHES:

  • Mon Quiet
  • Tues. Hammock 7:50 CST, Chair Powell Testimony 9amCST, Bowman and Williams 2:30pmCST
  • Wed. Chair Powell Testimony 9am CST, Bostic 11:00 am CST, Waller 4:05PM,
  • Thu. Quiet
  • Fri. Quiet

Economic Data week:

  • Mon. Consumer inflation expectations
  • Tue. WASDE Ag Numbers 9amCST, NIFB Optimism index
  • Wed. CPI
  • Thur. Initial Jobless Claims, PPI
  • Fri. Retail Sales, Capacity Utilization, Business Inventories

Futures 102: Hedging Grains with Options on Futures

Course Overview

Gain an understanding of how buyers and sellers of grains and oilseeds utilize futures and options to hedge their position to manage price risk.  This course will enhance the hedger’s understanding of the different strategies available as well as how the basis affects prices.

Start Now

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Hot Market of the Week

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 and options on futures needs.

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December 25 Corn

April Hogs satisfied a second upside PriceCount  objective before turning sideways with a range bound trade. At this point, IF the chart can resume its rally with new sustained highs, the third count would project a potential run to the 100.96 area.

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.

Brokers Trading System of the Week

With algorithmic trading systems becoming more prevalent in portfolio diversification, the following system has been selected as the broker’s choice for this month.

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PRODUCT

Mini SP500

 

SYSTEM TYPE

Day Trading

 

Recommended Cannon Trading Starting Capital

$36,000

 

COST

USD 199 / monthly

 

Get Started

 

Learn More

 

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Trading Levels for Next Week

Daily Levels for February 10, 2025

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Trading Reports for Next Week

First Notice (FN), Last trading (LT) Days for the Week:

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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.

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Russell 2000 Futures

The Russell 2000 Futures contract is a cornerstone of the futures trading world, providing traders with a robust tool to speculate on or hedge against movements in small-cap equity markets. Since its inception, the Russell 2000 Futures, often abbreviated as RUT 2000 Futures, has undergone significant evolution, becoming a vital component of modern futures trading. This piece explores its origins, development, and role in the market, while highlighting why trading futures with Cannon Trading Company is an exceptional choice for traders at all experience levels.

The Birth of the Russell 2000 Futures Contract

The Russell 2000 Index, launched in 1984 by the Frank Russell Company, tracks the performance of the smallest 2,000 stocks within the Russell 3000 Index, representing U.S. small-cap companies. The introduction of the Russell 2000 Futures Contract followed shortly after, in response to increasing demand for products enabling investors to trade on the performance of small-cap stocks in a standardized, liquid manner.

The Key Figures Behind the Inception

Several financial pioneers were instrumental in bringing the Russell 2000 Futures to life. William F. Sharpe, a Nobel laureate and consultant to the Frank Russell Company, helped refine the methodology for index construction. His contributions ensured that the Russell indices offered an accurate reflection of market segments.

The Chicago Mercantile Exchange (CME), a leading futures exchange, played a central role in facilitating the trading of these contracts. Key figures at CME, such as Leo Melamed, known as the “father of financial futures,” were advocates for innovation in derivatives markets. Under Melamed’s leadership, the CME expanded its offerings, including equity index futures like the RUT 2000 Futures.

Early Trading Anecdotes and Challenges

When trading began, many small-cap companies featured in the Russell 2000 were relatively unknown. Traders found the RUT 2000 Futures offered an efficient way to manage exposure to this high-risk, high-reward market segment. Anecdotes from early trading sessions illustrate the volatility of small-cap stocks and the corresponding opportunities in the futures market. For instance, a trader who identified a trend in burgeoning tech startups in the early 1990s could leverage RUT 2000 Futures to magnify returns or hedge against broader market risks.

One notable early trade occurred during the dot-com boom. A hedge fund manager, anticipating a bubble in small-cap tech stocks, used Russell 2000 Futures contracts to short the index. When the bubble burst, this strategic use of futures resulted in substantial profits for the fund, solidifying the contract’s reputation as a powerful tool for both speculation and risk management.

Evolution and Modern-Day Use

Over the decades, the Russell 2000 Futures have evolved in terms of accessibility, technology, and utility. Originally traded in open-outcry pits, the advent of electronic trading platforms revolutionized futures trading. CME’s Globex platform, introduced in 1992, allowed traders worldwide to access RUT 2000 Futures, increasing liquidity and efficiency.

Contract Specifications

The modern Russell 2000 Futures contract has standardized terms that make it attractive to a broad range of traders. Key specifications include:

  • Contract Size: $50 times the Russell 2000 Index value.
  • Tick Size: 0.10 index points, equivalent to $5 per tick.
  • Settlement: Cash-settled to the final index value.

These attributes make it suitable for individual traders and institutional investors alike. Additionally, the introduction of E-mini and Micro E-mini RUT Futures has lowered barriers to entry, enabling smaller traders to participate without excessive capital requirements.

Hypothetical Trading Scenario

Consider a trader bullish on small-cap stocks due to favorable economic conditions. With the Russell 2000 Index trading at 1,800 points, the trader buys two RUT 2000 Futures contracts at this level. Each contract’s notional value is $90,000 ($50 × 1,800), requiring a margin deposit of roughly $6,000 per contract.

The index rises to 1,850, yielding a gain of 50 points. For two contracts, the profit is $5,000 ($50 × 50 points × 2 contracts). This example demonstrates how RUT 2000 Futures enable traders to amplify returns with minimal upfront capital, though the risks of leveraged losses must also be acknowledged.

The Role of Futures Brokers

The evolution of futures trading platforms and brokerage services has been crucial in shaping the market. Futures brokers serve as the backbone of trading, offering access to platforms, market data, and educational resources.

Cannon Trading Company: A Premier Futures Broker

Cannon Trading Company has established itself as a top-tier futures broker, earning 5-star ratings on TrustPilot and accolades for its decades of experience. Here’s why Cannon Trading is a standout choice for trading futures contracts:

  • Diverse Platform Selection: Cannon Trading provides access to industry-leading platforms such as NinjaTrader, TradeStation, and CQG. Each platform is tailored to different trading styles, ensuring both novice and seasoned traders have the tools they need.
  • Educational Resources: Cannon Trading offers extensive resources for futures traders, including market analysis, webinars, and trading guides. This focus on education empowers clients to make informed decisions.
  • Regulatory Excellence: With a stellar reputation among regulatory bodies like the NFA and CFTC, Cannon Trading emphasizes transparency and compliance, giving traders peace of mind.
  • Personalized Service: Unlike generic online brokers, Cannon Trading provides personalized service, pairing clients with experienced brokers who understand their unique needs.

Real-Life Case Studies

Case Study 1: Hedging Risk with RUT 2000 Futures

In 2020, a small-cap mutual fund manager faced uncertainty amid the COVID-19 pandemic. Concerned about potential market downturns, they used RUT 2000 Futures to hedge their portfolio. By selling futures contracts, the manager mitigated losses as the index fell, demonstrating the contracts’ value for risk management.

Case Study 2: Leveraged Gains

An individual futures trader, recognizing strong earnings growth in small-cap companies in 2021, decided to go long on E-mini RUT Futures. With precise entry and exit strategies, the trader achieved a 25% return on initial margin, highlighting the profit potential of leveraged futures trading.

The Future of Russell 2000 Futures Trading

As technology advances, the Russell 2000 Futures market will continue to grow. Innovations like AI-driven trading algorithms and blockchain-based clearing systems promise to enhance efficiency and transparency. Moreover, the increasing globalization of markets means more traders from diverse backgrounds will access RUT 2000 Futures, further boosting liquidity.

The Russell 2000 Futures contract has evolved from a niche product into a vital instrument for traders worldwide. With its origins rooted in the vision of financial pioneers, the RUT 2000 Futures now serve as a powerful tool for hedging and speculation in the small-cap equity market. For traders seeking an exceptional futures broker, Cannon Trading Company stands out for its unparalleled platform selection, regulatory excellence, and client-focused approach. Whether you are a novice futures trader or an experienced market participant, Cannon Trading provides the resources and support necessary to succeed in the dynamic world of futures trading.

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.

Fed Holds Rates Steady Amid Persistent Inflation; Markets React with Volatility

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Futures Brokers USA

What you need to know before trading futures on Jan. 30th:

By Mark O’Brien, Senior Broker

General:

Going into the fed’s meeting this month, financial markets widely expected the central bank to hold interest rates steady, breaking a streak of three consecutive rate cuts.  Pointing to stubborn inflation readings and an economy hardly in need of rescuing, the Fed. did just that: nothing.  “We feel like we don’t need to be in a hurry to make any adjustments,” Fed Chairman Jerome Powell said.   The Fed’s policymaking committee voted unanimously to maintain their target for the federal-funds rate today, at a range of 4.25%-4.5%.  The FOMC announcement noted unemployment “has stabilized at a low level” and “inflation remains somewhat elevated,” which noticeably removed a reference from its prior rate decision of inflation making “progress” toward the 2% target.  Inflation has remained above the Fed’s 2% target for 45 consecutive months and counting.

Stock Indexes:

Stock index futures started oscillating immediately after the fed announcement at 1:00 Central Time, and through Fed chairman Jerome Powell’s 1:30 press conference with the March E-mini S&P 500 trading to daily contract lows just shy of 6040.00 between those events then swinging up over 40 points above 6080 within 30 minutes.

Energy:

Oil prices fell today, with the U.S. benchmark West Texas Intermediate touching a multi-week low after today’s weekly API report showed crude stockpiles rose more than expected last week.

The March crude oil futures contract fell to $72.33 a barrel intraday today, a ±$7.00 per barrel / $7,000 per contract move over just nine trading sessions and the lowest level since Jan. 2.

Grains:

Tightening global corn supplies have had investors’ attention for months and March corn futures have steadily made a bullish move.  Today’s intraday high of $4.97½ per bushel marks a ±80-cent gain since its $4.14 intraday low back on Oct. 17.

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Daily Levels for January 30th, 2024

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Economic Reports

provided by: ForexFactory.com
All times are Eastern Time ( New York)
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
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.