Open An Account
Free Demo Account Subscribe Here

Category: Future Trading News

As a high risk trading type, futures trading is not for someone who is faint-hearted. Though there are a number of different ways of investing in futures , it is important to stick to what you know. Treading into unknown waters is not something that you should do when dealing in futures.

From managing margins to ordering trades to doing market analysis and more if you want to, you can do that all by yourself – but you may betaking double the risk. Therefore, when trading in futures, it may be better to seek advice from a professional trader.

Professional trading experts at Cannon Trading can help you with your futures trading. We are also there to keep you updated with the latest on futures trading and market news. All the news and latest articles on futures trading are published on our site under the category Archive Futures Trading News, which you are currently browsing through. Read more and the latest here and keep updated.

Futures Trading

Posted on by Ilan

Futures trading has become a popular avenue for investors looking to speculate on price movements in various markets, including commodities, currencies, indices, and interest rates. Futures contracts are standardized agreements to buy or sell an asset at a predetermined price on a future date, making them versatile tools for both speculation and hedging. As markets grow increasingly volatile and interconnected, many investors are drawn to trading in futures not only to potentially earn profits from price swings but also to hedge against adverse market movements. This article delves into the fundamentals of trading with futures, explores how it can responsibly hedge other investments, discusses the role of futures brokers, and highlights Cannon Trading Company as a highly regarded brokerage option.

Futures Trading

Trading with futures involves the buying and selling of contracts that obligate the holder to transact an asset at a specific price on a predetermined date in the future. These contracts are standardized in terms of quantity, quality, and delivery specifics, which facilitates easy trading on exchanges. Key participants in futures trading include speculators, who aim to profit from price fluctuations, and hedgers, who seek to protect themselves against potential losses in other investments.

Trading in futures can span a range of underlying assets, including:

  • Commodities: such as crude oil, natural gas, gold, and agricultural products.
  • Currencies: such as the U.S. Dollar, Euro, Yen, and emerging market currencies.
  • Indices: including stock market indices like the S&P 500 and NASDAQ.
  • Interest Rates: such as treasury bonds and other fixed-income instruments.

Using Futures Trading to Hedge Other Investments Responsibly

One of the key applications of trading with futures is as a hedging tool. Investors and businesses can use futures contracts to lock in prices or protect against fluctuations in other assets. This process, known as hedging, is fundamental to managing risk, especially in volatile markets, and can be particularly healthy for your trading future.

  • Hedging Commodities Exposure – For companies involved in commodities (e.g., oil, agriculture), futures can provide a reliable hedge against price volatility. For example, an airline company that requires large quantities of jet fuel may use fuel futures contracts to lock in current prices and shield itself from the risk of rising oil prices. This hedging strategy helps the company forecast costs more accurately, ensuring smoother operations and financial planning for your trading future.
  • Protecting Stock Portfolio with Index Futures – Investors with significant equity holdings can use index futures to hedge against declines in the broader market. For instance, if an investor holds a large portfolio of stocks but anticipates a market downturn, they could sell futures contracts on a market index like the S&P 500. If the market does indeed decline, losses in the stock portfolio could be offset by gains from the short futures position.
  • Currency Hedging for International Investments – Trading futures is also instrumental in managing currency risk for companies and investors exposed to foreign exchange fluctuations. A U.S.-based investor with holdings in European stocks may wish to hedge against fluctuations in the Euro-to-Dollar exchange rate. By entering into futures contracts on the EUR/USD currency pair, the investor can lock in favorable exchange rates, mitigating potential losses from adverse currency movements in your trading future.
  • Interest Rate Hedging for Fixed-Income Portfolios – Bond investors and corporations with debt obligations can use interest rate futures to protect against the risk of rising rates. For example, a company planning to issue debt in the near future might buy interest rate futures to lock in current borrowing rates. This strategy provides a safeguard against the financial impact of future rate hikes, which could otherwise increase their interest expenses.

Responsible Hedging Practices in Futures Trading

While trading in futures can be a powerful hedging tool, it’s essential to approach it responsibly. Over-hedging, or using excessively large futures positions, can lead to unintended risks, such as missing out on favorable price movements or incurring losses if the hedge doesn’t correlate closely with the underlying exposure. Responsible hedging with futures involves:

  • Position Sizing: Ensuring that the size of the futures position aligns closely with the size of the asset being hedged.
  • Understanding Correlation: Selecting futures contracts with strong correlation to the underlying asset, which minimizes basis risk (the risk that the futures price and the spot price move differently).
  • Setting Limits: Implementing stop-loss orders and risk management limits to prevent potential overexposure to futures positions.

How Futures Brokers Assist Traders in Futures Trading

Trading futures requires access to exchanges, expert analysis, and the technical infrastructure necessary to execute trades quickly. Futures brokers play a pivotal role in providing these resources and services, making trading more accessible, efficient, and informed for retail and institutional investors alike.

  • Trade Execution and Access to Markets – Futures brokers provide traders with direct access to various futures exchanges, such as the Chicago Mercantile Exchange (CME) and Intercontinental Exchange (ICE). Brokers facilitate quick, efficient trade execution and ensure traders can access real-time market data, price quotes, and order routing systems.
  • Research and Market Analysis – Most reputable futures brokers offer a wealth of research and market analysis resources. They may provide daily market updates, trading insights, technical analysis, and economic data that help traders make informed decisions. Some brokers even offer specialized analysis for different futures markets, including commodities, financials, and currencies, allowing traders to tailor their strategies according to specific markets.
  • Risk Management Tools and Support – Effective risk management is crucial for any trader, particularly in the high-stakes futures market. Brokers can provide tools like margin monitoring, stop-loss orders, and options for leverage management. Many brokers also offer educational resources to help traders develop a deeper understanding of risk management techniques, which is invaluable for both new and seasoned traders.
  • Trading Platforms and Technology – In today’s fast-paced markets, the technology a broker offers can make a significant difference. Futures brokers typically provide platforms with advanced charting tools, customizable order types, and integrated news feeds to help traders keep pace with the market. Some brokers even offer proprietary software with specialized features for futures trading, such as options chains, advanced technical analysis tools, and real-time risk assessments.
  • Education and Training – Trading futures can be complex, and education is key to developing the skills necessary to succeed. Many brokers offer resources ranging from online tutorials and webinars to one-on-one coaching and seminars. These educational resources enable traders to deepen their understanding of markets, strategies, and trading platforms.

Why Cannon Trading Company is a Top Choice for Futures Trading

For those seeking a reliable futures broker, Cannon Trading Company stands out as a premier choice. With decades of experience, a strong regulatory record, and consistently high customer ratings, Cannon Trading Company has earned a reputation as a trustworthy and knowledgeable broker in the industry. Here’s why Cannon Trading is widely regarded as a top-tier option for futures traders.

  • Decades of Industry Experience – Founded in 1988, Cannon Trading has been serving futures traders for over three decades. This longevity not only speaks to the firm’s reliability but also indicates a deep understanding of the futures markets. Cannon Trading’s experienced brokers can provide insights and guidance to help clients navigate market complexities and develop effective strategies.
  • Exceptional Customer Ratings on TrustPilot – With a 5 out of 5-star rating on TrustPilot, Cannon Trading has consistently demonstrated its commitment to excellent service. Positive customer feedback highlights the firm’s attentive and knowledgeable support, responsiveness, and user-friendly platform. TrustPilot reviews provide potential clients with insight into the broker’s client-first approach, affirming Cannon Trading’s reputation as a reliable and client-focused broker.
  • Stellar Regulatory Record – Regulatory compliance is essential in the financial industry, and Cannon Trading maintains a strong regulatory record. The firm is a registered Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) and a member of the National Futures Association (NFA). This affiliation underscores Cannon Trading’s adherence to high ethical and operational standards, giving traders peace of mind regarding the firm’s integrity and professionalism.
  • Advanced Trading Platforms – Cannon Trading offers a range of sophisticated trading platforms to meet the needs of different traders. Whether clients require a powerful platform for advanced technical analysis or an easy-to-navigate interface for beginners, Cannon Trading has options suited to various levels of experience. Some of the platforms available include CannonPro, OEC Trader, and FireTip, all of which provide real-time data, advanced charting capabilities, and customizable tools.
  • Wide Range of Market Access and Instruments – Cannon Trading provides access to a diverse selection of futures markets, from commodities like oil and precious metals to financial instruments such as stock indices and foreign currencies. This wide range allows traders to diversify their portfolios and take advantage of opportunities across multiple asset classes.
  • Dedicated Customer Support and Broker Assistance – Cannon Trading’s team of experienced brokers is available to assist clients with everything from account setup to advanced trading strategies. The firm prides itself on its hands-on approach, providing dedicated support to help clients achieve their trading goals. Cannon Trading’s brokers can offer personalized guidance, helping traders navigate the complexities of futures markets with confidence.
  • Education and Resources for Traders – Cannon Trading places a strong emphasis on trader education. The firm offers a range of resources, including market commentary, educational articles, webinars, and daily analysis to keep clients informed about market developments. Whether clients are new to futures trading or experienced professionals, Cannon Trading’s educational offerings can help them improve their knowledge and refine their trading strategies.
  • Futures Trading and Choosing the Right Brokerage – Futures trading offers investors unique opportunities to manage risk, capitalize on market volatility, and hedge other investments. By responsibly using futures contracts, investors and companies can lock in prices, protect against adverse market movements, and better forecast their financial outcomes. Futures brokers play a crucial role in this process by providing access to markets, offering research and analysis, and delivering technology and support that enable traders to execute their strategies effectively.

Cannon Trading Company stands out as an excellent choice for traders seeking a reliable, experienced, and client-focused futures broker. With its decades of industry experience, high customer ratings on TrustPilot, and strong regulatory compliance, Cannon Trading offers traders a trustworthy partner in navigating the complexities of the futures markets. For those interested in futures trading, working with a reputable brokerage like Cannon Trading can provide the tools, resources, and support needed to make informed and strategic trading decisions. Whether one is hedging risk, seeking profits, or diversifying a portfolio, futures trading with the right broker can be a powerful addition to an investment strategy.

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

Inflation Uptick and Bitcoin’s Surge: Navigating New Highs in Crypto and CPI

Posted on by Ilan
Join our Private Facebook group

Subscribe to our YouTube Channel

Listen to our podcast: Subscribe on Apple, Spotify, Amazon, or wherever you listen to podcasts!

C105

CPI, Bitcoin New highs and More!

By Mark O’Brien, Senior Broker

 

General: 

 

Inflation perked up in October though pretty much in line with Wall Street expectations, the Bureau of Labor Statistics reported Wednesday.

The consumer price index, which measures costs across a spectrum of goods and services, increased 0.2% for the month. That took the 12-month inflation rate to 2.6%, up 0.2 percentage point from September.

 

Excluding food and energy, the move was even more pronounced. The core CPI accelerated 0.3% for the month and was at 3.3% annually.

 

Both upticks were in line with economists’ expectations.

 

Next up, tomorrow at 7:30 A.M., Central Time, the Bureau of Labor Statistics releases its latest reading on prices at the wholesale level: its Producer Price Index.

 

Energy:  

 

Dec. crude oil traded briefly below $67.00 per barrel today for the second day in row – prices not seen in a couple of weeks.  Crude oil prices have stayed under pressure most of the year as China, the world’s second-largest economy and leading crude oil importer, has endured a sluggish post-Covid recovery in demand.

 

OPEC has been considering an unwinding of OPEC+ supply cuts in 2025 – if gradually.  In September, OPEC+ postponed plans to begin steadily rolling back on the 2.2 million-barrel-per-day voluntary cut by two months in an effort to stem the slide of oil prices.  The 2.2 million bpd cut, which was implemented over the second and third quarters, had been due to expire at the end of September.

 

Even if OPEC+ doesn’t unwind the cuts, the future of prices is still looking bleak as key oil producers outside the OPEC alliance like the U.S., Canada, Guyana and Brazil are also planning to add supply.

 

The forecast for oil demand next year has hovered near the 1-million barrel-per-day level.

 

Crypto:  

 

December Bitcoin futures continued its powerful upward price move today, puncturing 90,000 with an intraday high of 94,795, a ±$20,000 per contract move in just seven trading days to its latest all-time highs.  Traders believe the record-run in the world’s largest cryptocurrency is poised for even more gains on the back of U.S. elections that saw a swell of pro-crypto candidates win office in the Senate and House of Representatives.

 

TRY trading micro bitcoin futures in demo mode!

 

stars
 

Daily Levels for November 14th 2024

68188951 7c11 49ee ad5b 31f1eab06dcd

Economic Reports
provided by:ForexFactory.com
All times are Eastern Time ( New York)
2751ca52 5ef8 44af b38f f4aeb9a84b07
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.
Contact
S
Cannon Trading Company
12100 Wilshire Boulevard
Suite 1640
Los Angeles, CA 90025
(800) 454-9572
Follow Us
Facebook  Twitter  Instagram
Visit Our Website

 

Bull Market Pause: Equity Stalls, Crypto Surges with Presidential Boost

Posted on by Ilan
Join our Private Facebook group

Subscribe to our YouTube Channel

Listen to our podcast: Subscribe on Apple, Spotify, Amazon, or wherever you listen to podcasts!

Bitcoin1

Movers and shakers!

By John Thorpe, Senior Broker

 

While in the current Bull market, the equity Indices stalled today in likely anticipation of tomorrows CPI. Another bull, Crypto, has a slightly different motivation and that is the warmth of president elect Trump’s endorsement of the crypto industry. Crypto has once again captured many an imagination, here are some data points you may be interested in about Bitcoin Futures ( and MICRO Bitcoin futures):

  • During the election 4 years ago, Bitcoin was trading near $14K, Ether around $560 and the suite traded a total of close to 11K contracts ($761M)
  • Nearly 2/3 of volume was traded before the US open, twice what we typically see, as traders were accessing our markets
  • Compared to 4 years ago, there was shift in volume distribution from Prop to now HF trading as paper continues to enter the space
  • By EOD on the 6th the suite traded a record $16B, over 20x more than last election
  • Ranked #2 in total contracts traded (until yesterday)
  • Total OI was a record $18.4B, with various other records primarily in the bitcoin products
  • These figures underscore the robust liquidity, client demand and trust in our crypto market place
  • NOW: Bitcoin trading at record of around $88K
  • 20% increase from just a week ago heading into the elections (+500% since prior election)
  • Ether trading around $3,300, +35% from last week, +490% vs. prior election
  • Bitcoin & Ether futures continue to reach new OI records,
  • Both hit OI records Friday
  • Yesterday we topped the Friday total notional OI record by over 20%
  • Micros are trading a combined ADV in November is nearly double that of Oct
  • Volatility is below YTD averages, margins remain steady for both
  • It’s the 1 year anniversary of CME becoming the leading exchange for Bitcoin Futures Notional Open Interest

 

Today’s News:

Updated: November 12, 2024 7:55 am

Redbook Weekly US Retail Sales Headline Recap

 

**Redbook Weekly US Retail Sales were +4.8% in the first week of November 2024 vs November 2023

**Redbook Weekly US Retail Sales were +4.8% in the week ending November 9th vs yr ago week

 

 

Watch Tomorrow’s Movers and Shakers:

 

 

CPI Consumer Price Index @ 7:30 am CDT.

 

CPI Consensus Outlook

More of the same is the call with a familiar 0.2 percent increase for total CPI on the month and a 0.3 percent rise for the core. Year on year, forecasts center on 2.6 percent for total CPI, up from 2.4 percent in September, and the consensus looks for a 3.3 percent increase for the core. Reports like this have been making investors restless about lack of progress toward the 2 percent target.

Earnings: After the close 233 Billion Market cap Cisco Systems reports. A total of 203 companies report

 

stars
 

Daily Levels for November 13th 2024

bdd1f9a0 156d 4f55 bfc9 e0b92b7049c0

Economic Reports
provided by:ForexFactory.com
All times are Eastern Time ( New York)
f9f16dba bd45 4db2 9587 853b6b032930
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.
Contact
S
Cannon Trading Company
12100 Wilshire Boulevard
Suite 1640
Los Angeles, CA 90025
(800) 454-9572
Follow Us
Facebook  Twitter  Instagram
Visit Our Website

 

Election Highs and Market Surprises: Navigating the 2024 Bull Run

Posted on by Ilan
Join our Private Facebook group

Subscribe to our YouTube Channel

Listen to our podcast: Subscribe on Apple, Spotify, Amazon, or wherever you listen to podcasts!

C99

This bull market has a story behind it.

11 November 2024

By GalTrades.com

This bull market has a story behind it.

  • SPX rose 22.44 points (0.38%) to 5,995.54 to     end the week up 4.66%; posted its best weekly gain of the year.
  • Dow Jones     Industrial Average® ($DJI)     added 259.65 points (0.59%) to 43,988.99 to end the week up 4.61%
  • Nasdaq     Composite®($COMP)     climbed 17.31 points (0.09%) to 19,286.78 to end the week up 5.74%.
  • 10-year     Treasury note yield (TNX)     fell four basis points to 4.31%, but the 2-year yield added three basis     points to 4.25%. Shorter-term yields, which are more closely connected to     near-term rate policy, gained on longer-term ones this week.
  • Cboe     Volatility Index® (VIX)     fell to 14.99, near a two-month low.

The S&P500 is above 6,000 at the time of this writing, as the rally to record highs continued. Interestingly, the yield on the 10-Year Treasury is pacing to finish the week lower despite a huge swing higher in reaction to the election outcome. Donald Trump’s victory has caused bank and industrial stocks to surge on the expectations of less regulation and a pro-business environment. Technology stocks are a notable underperformer Friday, with all the Magnificent 7 in the red except for Tesla.

Did anyone predict the market will up so much with a trump victory? I was following lots of analyst and portfolio managers in order to understand what to expect from the markets with a Trump or Kamala victory. And no one predicted the markets will go up as much as they did with a Trump win. In fact, there were lots of predictions the markets will sell off after the elections.

So now what? From what I read it was institutional money that drove the markets up and not retail investors. And that should be a positive for the markets. From a near-term perspective, new all-time highs are bullish, and we haven’t yet seen any evidence that the post-election rally is exhausted. The bearish view would likely cite a near-term overbought technical status and a valuation that has become even more stretched. I do feel the markets are stretched and it’s always healthy to have a pull back, parabolic moves tend to have a rubber band effect. Trade with caution. On top of the Trump rally, we got a ¼ point rate cut from the FED; which finally sent bond yields down a bit. Keep a close eye on the 10 year this week and going fwd. Respect the uptrend, that’s what I keep hearing.

We remove the risk of higher corporate tax under Trump or higher regulations, but Valuations for the S&P is at 22.5, that’s a bit stretched. And earnings estimates have been getting trimmed the last few months.

So, if we’re overbought, what can be a catalyst that will trigger some kind of cool off? The CPI/PPI reports this week have the potential to create a “profit taking” excuse, regardless of the data, given the recent rally. It may Jostle the trend for the short term.

Usually when the dollar rallies it’s not a positive for equity markets.

Financial ETF XLF slated for best day in two years

Bank shares got a boost with JPMorgan Chase climbing 11.5% and Wells Fargo jumping 13%. The SPDR S&P Regional Bank ETF (KRE)continued to climb in midday trading and is now up about 12%.

Credit card stocks soar

Two leading credit card companies were among the top performing stocks in the S&P 500 in early trading, according to FactSet. Shares of Discover Financial jumped 22%, while Capital One popped about 17%.

Solar stocks sold off Wednesday ETF TAN Republicans won control of the Senate, amid fears the Inflation Reduction Act, which helps fund clean energy manufacturing in the U.S., will be repealed.

The small-cap benchmark Russell 2000 surged, hitting a 52-week high. Small companies, which are more domestic-oriented and cyclical, are believed to enjoy outsized benefits from Trump’s tax cuts and protectionist policies. Trump is viewed as supporting lower corporate tax rates, deregulation, and industrial policies that favor domestic growth, all of which could provide more stimulus to the U.S. economy and benefit risk assets

Historically speaking, stocks rallied into year-end from Election Day. However, the S&P 500 and Russell 2000 perform even better during presidential election years, while the Nasdaq Composite does worse.

Goldman Sachs’ Kostin says earnings growth will drive stocks higher into 2025

“Robust earnings growth should drive continued equity market appreciation into next year,” he wrote in a Wednesday note. “We forecast EPS growth of 11% in 2025 and 7% in 2026, although those estimates may change as the new administration’s policy agenda comes into clarity.” Kostin’s team is keeping its 12-month S&P 500 target of 6,300, suggesting upside of about 9% from Tuesday’s close. The magnitude of the rally in stocks could be curtailed by a sharp rise in the 10-year Treasury yield, the strategist said.

Futures:

Bitcoin, which could benefit from relaxed regulation, soared to an all-time high and topped $76,000. The dollar index climbed to its highest level since July on the belief that Trump’s proposed tariffs against major U.S. trading partners would boost the greenback. The 10-year Treasury yield jumped to around 4.43% on speculation Trump’s proposed tax cuts and other spending plans would spark economic growth, but also widen the fiscal deficit and reignite inflation.

Dollar at overbought levels, says strategist

On a technical level, the dollar has cleared the 104 resistance level, leaving the 106-107 level as the next major hurdle to overcome.

“Momentum is confirming the breakout but is overbought short-term. Support for pullbacks sets up at 104 and the 200-day moving average at 103.85,” said LPL Financial chief technical strategist Adam Turnquist.

Corn futures (/ZCZ24) closed higher to end the past week (+0.82%) with the December contract trading at highs last seen in late June. The USDA in its November World Agricultural Supply and Demands Estimates (WASDE) report estimated U.S. corn production at 15.143 billion bushels. This was below October’s 15.204 billion bushel estimate and below average analysts’ estimates for 15.190 billion bushels.

Cotton futures (/CTZ24) posted modest declines on Friday (–0.10%) after the USDA lowered U.S. cotton export projections by 200,000 bales to 11.3 million bales. The USDA also raised U.S. ending stocks projection by 200,000 bales to 4.3 million bales.

Crude oil futures (/CLZ24) ended the past week in the red as U.S. oil inventories posted a larger than expected build during the reporting period.

In its Weekly Petroleum Status Report, the Energy Information Administration (EIA) said crude oil stockpiles increased by 2.1 million barrels during the week ending November 1. This was above expectations for a 1.8-million-barrel build.

U.S. oil production remained unchanged last week and averaged 13.5 million barrels per day. This was up 300,000 barrels per day from one year ago.

On the oil product side, distillate inventories increased by 2.9 million barrels, contrary to market expectations for a 1.5-million-barrel draw. Distillate inventories are now 6% below the five-year average for this time of year.

Gasoline inventories rose by 400,000 barrels, contrary to forecasts for a 1.6-million-barrel draw. These stockpiles are now 2% below the five-year average.

EIA said gasoline production increased modestly from the previous week and averaged 9.7 million barrels per day. Distillate production also increased versus last week, averaging 5.1 million barrels per day.

The agency also reported that U.S. ethanol production increased last week, averaging 1.105 million barrels per day. Expectations were for 1.096 million barrels per day.

Ethanol inventories increased last week to 22 million barrels. Traders were expecting inventories of 22.4 million barrels.

Bonds: a run to 5% on the 10-year Treasury has been a level that gave markets pause in the recent past.”

China: China stock ETF drops amid Trump tariff fears. China-related stocks felt additional pain Friday on yet another disappointing stimulus update. What the market wants to see is the Chinese government put cash directly in the hands of people to boost consumption.

Earnings:

If you’ve been listening to companies’ post-earnings conference calls. Manufacturing has been weak, and there’s a freight recession.

FactSet pegged third-quarter S&P 500 EPS growth at 5.3% year over year, up from 5.1% a week ago. With 91% of companies reporting, 75% have delivered a positive earnings surprise and 60% have reported a positive revenue surprise.

It’s a quieter week of earnings with only 9 companies in the S&P 500 scheduled to report. Within the portfolio, Home Depot reports before the opening bell Tuesday and Disney before the opening bell Wednesday. Other notable companies reporting are Shopify, Tyson Foods, AstraZeneca, Spotify, Occidental, Cisco, Advance Auto Parts, Applied Materials, and Alibaba. Earnings may be on the lighter side.

  • Monday     (11/11): Monday.com     Ltd. (MNDY), Zeta Global Holdings Corp. (ZETA), Assured Guaranty Ltd.     (AGO)
  • Tuesday     (11/12): Home Depot     Inc. (HD), AstraZeneca (AZN), Sea Ltd. (SE), Live Nation Entertainment     Inc. (LYV), Tyson Foods (TSN), On Holdings (ONON), Spotify Technology SA     (SPOT), Suncor Energy, Occidental Petroleum (OXY), Cava Group (CAVA)
  • Wednesday     (11/13): CyberArk     Software Ltd. (CYBR), Cisco Systems Inc. (CSCO), Tetra Tech Inc. (TTEK),     Helmerich and Payne Inc. (HP)
  • Thursday     (11/14): Walt     Disney Co. (DIS), JD.com Inc. (JD), NetEase Inc. (NTES), Applied Materials     (AMAT), Post Holdings (POST)
  • Friday     (11/15): Alibaba     Group (BABA), Spectrum Brands Holdings (SPB)

Economic reports:

It’s a heavy week of economic data for inflation and consumer spending. On Wednesday there is the consumer price index (CPI) report and the next day we’ll see the producer price index (PPI) report. The October retail sales report is Friday.

  • Monday     (11/11): No     reports
  • Tuesday     (11/12): NFIB Small     Business Optimism
  • Wednesday     (11/13): Consumer     Price Index (CPI), Core CPI, EIA Crude Oil Inventories, MBA Mortgage     Applications Index, Treasury Budget
  • Thursday     (11/14): Continuing     Claims, Producer Price Index (PPI), core PPI, EIA Natural Gas Inventories,     Initial Claims
  • Friday     (11/15): Business     Inventories, Capacity Utilization, Export Prices, Import Prices,     Industrial Production, NY Fed Empire State Manufacturing, Retail Sales

 

 

Technical analysis:

The Russell 2000 index (RUT) gapped up 5.8% to fresh two-year highs on Wednesday despite a corresponding significant jump in bond yields. Furthermore, the index has held its ground, with only some minor consolidation following that move, which is characteristically bullish price action. The only near-term flag is that the Russell’s RSI is currently sitting at a slightly (overbought) level of 72.

Market Breadth:

SPX breadth lifted to 75.15% from 69.74%, the CCMP moved up to 50.83% from 45.13%, and the RTY jumped to 66.74% from 55.43%.

Trading stocks, commodity futures and options involves a substantial risk of loss. The information here is of opinion only and do not guarantee any profits. Past performances are not necessarily indicative of future results.

 

stars
5e4e4ceb 89ac 4712 8536 7897ad3f883d

Daily Levels for November 12th 2024

08700cd6 f7e0 475d 94c8 ff43c2b9ec3f

Economic Reports
provided by:ForexFactory.com
All times are Eastern Time ( New York)
64c19515 a67e 4ac5 8ab7 58acd291f1f9
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.
Contact
S
Cannon Trading Company
12100 Wilshire Boulevard
Suite 1640
Los Angeles, CA 90025
(800) 454-9572
Follow Us
Facebook  Twitter  Instagram
Visit Our Website

 

Weekly Newsletter: The Week Ahead in Futures Trading + Trading Levels for Nov. 11th

Posted on by Ilan
Get Real Time updates and more by joining our Private Facebook Group!
Subscribe to our YouTube Channel

Veterans Day

Cannon Futures Weekly Letter Issue # 1216

In this issue:

  • Important Notices – Veteran’s Day, CPI, PPI
  • Futures 102 – Trading Contest – REAL CASH Prizes
  • Hot Market of the Week – July-Dec. Corn Spread
  • Broker’s Trading System of the Week – Nikkei 225 Swing System
  • Trading Levels for Next Week
  • Trading Reports for Next Week

 

Important Notices – Next Week Highlights:

 

The Week Ahead

By John Thorpe, Senior Broker

  • Veterans Day Monday the Banks, Bond market and Federal officers are closed,
  • 13 Fed Speakers Powell on Thursday!
  • 821 earnings
  • CPI Wed, PPI Thursday!

 

Futures 101: Ask a Broker!!

Spread Trading?

Spread Trading

 

Futures 102: Trading Contest – Trade Against the Pro!

Challenge Details

Test-drive strategies with our range of futures, including standard- and Micro-sized contracts across Cryptocurrency, Equities, FX, Agriculture, Metals, Energy and Interest Rates. Gain valuable experience in a simulated, risk-free environment while trading against peers and industry professional Scott Bauer.

GET STARTED!
cf438fb9 f2e1 412e 8e34 9398b739fcf8

 

stars

3b644da2 2bee 4d39 8d98 5208a20bec39

 

    • Hot Market of the Week – July -Dec Corn Spread

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

July -Dec Corn Spread

The July – Dec corn spread satisfied its second upside PriceCount objective early last month and corrected. Now, the chart is poised to resume its rally where new sustained highs would project a possible run to the 11.75 area.

 

PriceCounts – Not about where we’ve been , but where we might be going next!

dbfaff1d a7a1 407d 9b9b ac58d7a723c2

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.

   Broker’s 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.

DaGGoR Rider M1C NQ

PRODUCT

NQ – Mini NASDAQ

 

SYSTEM TYPE

Swing Trading

 

Recommended Cannon Trading Starting Capital

$40,000

 

COST

USD 150 / monthly

 

Get Started

Learn More

1b80c371 48c5 4acb bf0f 5b6a463a8dc7

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.
Would you like to receive daily support & resistance levels?
Yes
S
No
S

Daily Levels for November 11th, 2024

2999b575 e1ec 4a01 82ef ac30f6fc230a

Weekly Levels for the week of November 11th, 2024

eb585d8a 0072 4182 b001 00f81f2a8d4c

 

bf9b3e0d 9c23 44e8 980c a8c01bfbe2cf

Trading Reports for Next Week

First Notice (FN), Last trading (LT) Days for the Week:
fffa0060 93de 4100 9a27 01b8dfc142d1

Improve Your Trading Skills

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

Explore trading methods. Register Here

* 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.

Why Trade Bitcoin Futures? Ask a Broker & 30 Year Treasury Bond Review

Posted on by Ilan
Join our Private Facebook group

Subscribe to our YouTube Channel

Listen to our podcast: Subscribe on Apple, Spotify, Amazon, or wherever you listen to podcasts!

Bitcoin

 

Elections and FOMC are in the rear view mirror.

Safe trading ahead to all!

Ask a Broker: Why Trade Bitcoin Futures?
thumbnail?url=https%3A%2F%2Fi.ytimg.com%2Fvi%2FtQSPiEDjKkc%2Fhqdefault

 

stars
 

December 30 Year Treasury Bonds

December 30 year treasury bonds have resumed their slide which has the chart approaching its low percentage fourth downside PriceCount objective. A completion of this count would suggest we have potentially satisfied this phase of the bear move. A trade below the May reactionary low would formally negate the remaining unmet counts.
0644a716 9943 43df a82c 7c0ddaee2555

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.

Daily Levels for November 8th 2024

9a989801 d3dd 4d42 bff9 699afc8569bc

Economic Reports
provided by:ForexFactory.com
All times are Eastern Time ( New York)
9cb71b02 4acf 4999 b20f 4319c36ffa70
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.
Contact
S
Cannon Trading Company
12100 Wilshire Boulevard
Suite 1640
Los Angeles, CA 90025
(800) 454-9572
Follow Us
Facebook  Twitter  Instagram
Visit Our Website

 

How Trade Oil Futures

Posted on by Ilan

The oil market is one of the most significant and dynamic global markets, with crude oil futures representing one of the most actively traded commodities worldwide. For both new and experienced traders, understanding how to trade oil futures is key to gaining exposure to the oil market, which is impacted by a multitude of factors, from geopolitics to technological advancements. In this guide, we’ll explore the history of crude oil futures trading, why they are so popular, and the advantages and disadvantages for various types of traders, including retail traders, institutional traders, and hedgers. We’ll conclude with an analysis of oil price forecasts for the end of the year, addressing relevant factors that may impact these predictions.

The Origins of Oil as a Tradable Commodity

Oil, often referred to as “black gold,” has been a critical resource in the global economy since its discovery as a fuel source. The journey of oil from its early use to becoming a dominant global commodity on the futures trading market is complex. Originally, oil was traded in physical markets, where buyers and sellers would negotiate contracts for delivery. However, as global energy demand grew, especially in the 20th century, oil became an essential commodity, fueling industries, economies, and transport systems worldwide.

To facilitate oil trading and address the volatility in oil prices, crude oil futures were introduced in the 1980s, allowing for price stabilization and hedging. The New York Mercantile Exchange (NYMEX) launched the first crude oil futures contract in 1983, followed by similar offerings from the Intercontinental Exchange (ICE) and other exchanges. These contracts allowed market participants to buy or sell oil at a predetermined price on a future date, bringing a significant degree of predictability and security to the volatile oil market.

Why Crude Oil Futures are Popular

Crude oil futures are among the most popular futures contracts, and there are several reasons why traders are drawn to crude oil futures trading:

  • Liquidity: The oil futures market is one of the most liquid markets globally. High liquidity means that there is always a buyer or seller at any given time, making it easier for traders to enter and exit positions.
  • Volatility: Oil prices are highly sensitive to changes in supply, demand, geopolitical tensions, and economic shifts. This volatility presents opportunities for traders to profit from price movements, whether they are upward or downward.
  • Transparency: Unlike other markets, where information may not always be easily accessible, the oil market is relatively transparent, with data on supply, demand, inventory levels, and geopolitical developments widely available.
  • Global Significance: Oil is essential for transportation, manufacturing, and energy production, making it a critical commodity globally. Consequently, oil futures are a popular contract for speculation and risk management, given the reliance of the world economy on oil.

How Trade Oil Futures

To successfully engage in crude oil futures trading, traders should familiarize themselves with the trading process, understand market terminology, and stay informed on global events. Below are key steps for how trade oil futures:

  • Choosing a Brokerage: Selecting the right brokerage is the first step. Brokers that offer crude oil futures trading, such as E-Futures.com or Cannon Trading, provide platforms, tools, and guidance specifically tailored for futures traders.
  • Understanding Contracts: The most widely traded crude oil futures contracts are West Texas Intermediate (WTI) on the NYMEX and Brent crude oil on the ICE. These contracts specify the quantity (typically 1,000 barrels) and the quality of oil to be delivered, along with the future delivery date.
  • Leverage and Margin Requirements: Oil futures are leveraged products, meaning that a trader only needs to put down a fraction of the contract’s value (margin). While leverage can amplify profits, it also increases risk, as even a slight price movement against a trader’s position can result in significant losses.
  • Strategies: Some common trading strategies include day trading, swing trading, and position trading. Day trading involves capitalizing on intraday price fluctuations, while swing trading captures short-term trends over several days. Position trading, on the other hand, is suitable for those looking at long-term trends.
  • Monitoring Influences: Global events, weather patterns, and geopolitical tensions in oil-producing regions are critical to monitor, as they have direct impacts on oil supply and demand.
  • Risk Management: Setting stop-loss orders, understanding margin requirements, and using technical and fundamental analysis are essential risk management techniques in how trade oil futures effectively.

Advantages and Disadvantages of Trading Oil Futures

For Retail Traders

Advantages:

  • Access to Leverage: Retail traders can control large positions with relatively small amounts of capital due to leverage, allowing for potentially high returns.
  • Profit from Volatility: Retail traders often look for quick returns, and the volatility in the crude oil market can provide these opportunities.
  • Diverse Strategies: From day trading to holding long-term positions, retail traders can employ a variety of trading strategies to benefit from both short and long-term price movements.

Disadvantages:

  • High Risk: Leverage can be a double-edged sword. High volatility in oil prices, combined with leverage, can lead to significant losses.
  • Complex Market Factors: The oil market is influenced by numerous complex factors, including geopolitical tensions, natural disasters, and supply chain disruptions, which can be challenging for retail traders to analyze.
  • Margin Calls: If the market moves against a leveraged position, the trader might receive a margin call, requiring additional funds or leading to forced liquidation of the position.

For Institutional Traders

Advantages:

  • Risk Management: Institutional traders can hedge against other investments in energy or oil-dependent industries, allowing them to mitigate risks in their broader portfolios.
  • Access to Superior Data: Institutional traders have access to advanced trading platforms, market data, and analysis tools, giving them a competitive advantage in crude oil futures trading.
  • Liquidity and Execution: Institutional traders benefit from enhanced liquidity and can execute large trades with minimal slippage due to their established relationships with brokerages and exchanges.

Disadvantages:

  • High Costs: Institutional trading often involves high costs, including transaction fees, data feeds, and sophisticated trading technology.
  • Regulatory Scrutiny: Institutional traders are subject to regulatory requirements, which can restrict certain trading activities and require additional compliance.

For Hedgers

Advantages:

  • Price Stabilization: Companies in oil-dependent industries use crude oil futures to lock in prices, allowing them to stabilize costs and protect against price volatility.
  • Enhanced Budgeting and Planning: By locking in prices, hedgers can budget more effectively, making it easier to forecast costs and profits.
  • Reduced Exposure to Geopolitical Events: Oil prices are often sensitive to global political events, and hedgers can reduce their risk of exposure to such events by securing future oil prices.

Disadvantages:

  • Opportunity Costs: By locking in prices, hedgers may miss out on favorable price movements if the oil market shifts unexpectedly.
  • Initial Costs and Margins: Hedgers need to meet margin requirements, which may tie up capital that could be used elsewhere.
  • Complexity: Effective hedging requires a deep understanding of futures markets, as well as continuous monitoring of global oil trends.

Speculation on Oil Prices for the End of the Year

The price of crude oil futures heading into the end of the year is likely to be influenced by several critical factors, including global demand recovery, OPEC+ production decisions, and geopolitical issues.

  • Global Economic Recovery: As economies recover from global events, the demand for oil is expected to rise, pushing up prices. However, any setbacks, such as renewed economic slowdowns or shifts in energy policies, could temper demand.
  • OPEC+ Production Policies: OPEC+ decisions on production quotas will continue to be a key factor in crude oil futures trading. Tightening or loosening production levels could have an immediate impact on oil prices, as these decisions directly affect global supply.
  • Energy Transition Policies: The ongoing shift toward renewable energy may gradually dampen long-term oil demand, but in the short term, supply constraints and increased demand for conventional energy sources could drive prices higher.

Based on current market conditions, analysts predict that oil prices could remain relatively high through the end of the year, with potential spikes if any supply disruptions occur. Crude oil futures may see increased buying pressure, but price sensitivity to unforeseen disruptions could cause fluctuations. Retail and institutional traders, as well as hedgers, should remain vigilant, monitoring relevant indicators and adjusting their strategies accordingly. Given these factors, how to trade oil futures effectively will require a close watch on economic reports, OPEC announcements, and geopolitical developments.

Understanding how to trade oil futures requires a grasp of market mechanics, key influences, and the reasons behind the popularity of crude oil futures trading. With high liquidity, volatility, and a strong influence from global factors, oil futures present unique opportunities and risks for traders of all kinds. For retail traders, the potential for high returns is met with significant risk. Institutional traders benefit from data and scale, but face regulatory challenges, while hedgers achieve price stability at the cost of flexibility.

The outlook for crude oil futures remains complex, with oil prices predicted to face various pressures that may drive prices higher or, conversely, cause corrections. As oil remains essential to the global economy, futures trading in this sector will continue to be a focal point for market participants. For anyone engaging in crude oil futures trading, maintaining a strategic approach and staying informed of global events are essential for navigating the unpredictable and profitable world of oil futures.

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

Post-Election Market Surge: Commodities, Equities Rally Ahead of FOMC Rate Decision

Posted on by Ilan
Join our Private Facebook group

Subscribe to our YouTube Channel

Listen to our podcast: Subscribe on Apple, Spotify, Amazon, or wherever you listen to podcasts!

C103

US Elections, FOMC

By Mark O’Brien, Senior Broker

 

General: 

 

On the heels of the U.S. Election Day results, commodities futures moves – up and down – have taken center stage in the financial world.  Topping the charts – literally – the E-mini S&P 500 and E-mini Dow Jones vaulted to new all-time highs with 130+ and 1400+ point upward moves, respectively.  Even the scrubby Russell 2000 took flight to new highs: up over 100 points, making it the stock index league leader in percentage gain at ±5.25%.

 

Outsize moves occurred across asset classes.  Dec. gold gave up ±$80 per ounce (an $8,000 per contract move), silver lost over $1.60 per ounce (also an $8,000 per contract move) and copper shed over 20 cents per pound – a ±5% / $5,000 per contract move.

 

Marking the biggest one-day move in eight years – going back to the U.K. vote for Brexit in June 2016, the ICE U.S. Dollar Index jumped 1.8%, hammering other currency futures like the Euro, Japanese Yen, Swiss Franc and Mexican Peso, the latter sinking to its weakest level against the dollar this year.

 

In terms of percentage movement, the day’s titleholder will likely be Bitcoin futures with the December contracts – full-sized and micro contracts – increasing over 9% with a ±$7,000 move up to its own all-time high, touching 76,000 for the first time.

 

More General: 

 

While the U.S. Election Day results have taken center stage, the futures markets are still keeping an eye on the rest of the upcoming potential market movers and that includes the conclusion of the most recent FOMC meeting tomorrow.  The Fed is expected to reduce the benchmark policy rate by 25 basis points after it slashed its benchmark rate by 50 basis points, delivering its first rate cut since 2020 after their last meeting in September.  The U.S. federal funds rate currently sits at 4.75%–5%. In September’s policy meeting, Fed policymakers anticipated the fed funds rate falling by additional 50 basis points by the end of this year, then another full percentage point through 2025, and a final half-point reduction in 2026, to end near the 2.75–3.00 per cent range.

 

 

stars

Daily Levels for November 7th 2024

7e9e43ee 5641 42ba b110 1c084721fb0a

Economic Reports
provided by:ForexFactory.com
All times are Eastern Time ( New York)
46a6a6dc 4930 4d3b 81c8 15721beed7a7
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.
Contact
S
Cannon Trading Company
12100 Wilshire Boulevard
Suite 1640
Los Angeles, CA 90025
(800) 454-9572
Follow Us
Facebook  Twitter  Instagram
Visit Our Website

 

Future S&P

Posted on by Ilan

The E-Mini S&P 500, a futures contract for the S&P 500 index, has grown to become one of the most popular financial products in the world for futures trading. From retail traders to institutional investors and hedgers, the E-Mini S&P offers a flexible, accessible way to participate in the stock market, speculate on price movements, and hedge against risks. Brokers play a crucial role in facilitating these trades, providing guidance, resources, and a robust platform for responsible futures trading. This article explores why indices like the S&P 500 are so popular, the importance of experienced brokers, and common mistakes that new traders should avoid when entering the complex world of futures trading.

Why are Stock Indices Like the S&P 500 Popular in Futures Trading?

The S&P 500, also known as the Standard and Poor’s 500 Index, represents 500 of the largest publicly traded companies in the United States. This index has become a barometer of the U.S. economy, and its futures contracts, like the E-Mini S&P 500, have become a popular choice for traders. But what makes these futures so attractive?

  • Broad Market Exposure: The S&P 500 is one of the most comprehensive indices, covering companies from various sectors, such as technology, healthcare, finance, and consumer goods. By trading futures on the S&P 500, traders can access the entire U.S. stock market in a single transaction, providing a straightforward way to diversify investments or take a position on the market as a whole.
  • Liquidity and High Volume: The E-Mini S&P 500 futures contract is one of the most actively traded contracts globally. This high level of liquidity allows traders to enter and exit positions with ease, even in large volumes, which is crucial for both retail and institutional traders.
  • Leverage and Capital Efficiency: Futures contracts, like the E-Mini S&P, offer leverage, meaning that traders only need to post a fraction of the total contract value as collateral. This leverage allows traders to control a more substantial position with less capital, potentially leading to higher returns.
  • Hedging Capabilities: The S&P 500 index futures provide an effective hedge against market fluctuations for investors who hold a portfolio of U.S. stocks. By taking opposite positions in the futures market, traders can offset potential losses in their portfolio, making it a preferred tool for risk management.

Questions? Click here.

How Can a Broker Assist in Stock Index Trading?

Brokers are essential in the stock index trading ecosystem. They provide traders with the necessary infrastructure, resources, and guidance to navigate the markets. Their services are tailored to cater to various types of traders, from retail investors to institutional clients and hedgers. Here’s how they assist each group:

Retail Traders

For retail traders, brokers offer a user-friendly platform, educational resources, and customer support to make trading more accessible. Brokers help retail traders in the following ways:

  • Platform Accessibility: Many retail traders lack the technical expertise or the capital that institutional traders have. Brokers simplify access to platforms that allow retail traders to trade E-Mini S&P 500 futures with low capital requirements.
  • Educational Resources: Brokers provide tutorials, webinars, and trading guides to help retail traders understand the basics of futures trading, technical analysis, and risk management. These resources are crucial for newcomers to grasp the complexities of the S&P 500 futures market.
  • Margin and Leverage Guidance: Many brokers offer guidance on responsible use of leverage, which is especially important for retail traders. They explain how leverage works, the potential for gains and losses, and how to set stop-loss orders to manage risk.

Institutional Traders

Institutional traders, such as hedge funds, asset managers, and pension funds, have larger capital bases and are typically more sophisticated in their trading strategies. Brokers offer these traders advanced tools and services to meet their complex needs:

  • Advanced Trading Platforms: Brokers offer platforms with advanced analytics, charting tools, and automated trading features, allowing institutional traders to make informed decisions quickly. Institutional clients often use algorithmic trading, and brokers provide the tools to facilitate this.
  • High-Level Market Analysis: Brokers offer market insights, proprietary research, and economic data that institutional traders rely on to make strategic decisions. Institutional clients often have dedicated account managers to help them stay informed and make tactical moves based on market conditions.
  • Execution and Speed: With high-frequency trading and large volumes at stake, institutional traders require precise and fast order execution. Brokers meet these needs by providing low-latency platforms that can handle large orders efficiently without slippage.

Hedgers

Hedgers, such as companies with large stock portfolios or those affected by economic cycles, use the E-Mini S&P 500 and other index futures to offset risks. Brokers assist hedgers with specific services:

  • Customized Hedging Strategies: Brokers work with hedgers to develop tailored strategies based on their exposure. This can involve shorting the S&P 500 futures to offset potential declines in their equity portfolios or using options to create risk management structures.
  • Risk Management Support: Brokers provide advice on margin requirements and stop-loss levels, which is essential for hedgers looking to protect against adverse market moves.
  • Regular Market Updates: For hedgers, staying updated on market trends is essential. Brokers offer real-time news feeds and economic reports to help these clients make informed decisions about when to enter or adjust their positions.

Common Rookie Mistakes in Futures Trading

New traders often face a steep learning curve when entering the futures markets, and the S&P 500 futures are no exception. Here are some rookie mistakes that traders should avoid:

  • Over-Leveraging: One of the most common mistakes is using excessive leverage, which amplifies both potential gains and losses. Many new traders underestimate the risks of leverage, leading to significant losses.
  • Ignoring Risk Management: Novice traders may neglect to set stop-loss orders or properly calculate position sizing, resulting in unmanageable losses if the market moves against them.
  • Lack of a Trading Plan: New traders often enter the market without a well-defined strategy or goals. Without a plan, they may make impulsive decisions, leading to inconsistent results and losses.
  • Failure to Stay Updated on Economic Data: Futures markets are sensitive to economic data releases, geopolitical events, and Federal Reserve announcements. New traders sometimes ignore these factors, which can lead to unexpected market swings and losses.
  • Emotional Trading: Trading futures can be intense, and emotions like fear and greed can cloud judgment. Many novice traders chase losses or overreact to short-term movements, which can erode their trading capital.

How Brokers Help Traders Avoid These Pitfalls

Experienced brokers help traders avoid these pitfalls by providing educational resources, effective trading tools, and disciplined practices. Here’s how they can make a difference:

  • Educational Programs: Brokers offer comprehensive training programs to educate new traders about risk management, technical analysis, and trading psychology. Knowledgeable brokers can empower traders to understand the importance of stop-loss orders, proper leverage use, and position sizing.
  • Guided Trade Execution: Many brokers offer order types that help traders stick to their plans, such as one-cancels-other (OCO) orders, which help enforce risk limits. They also provide demo accounts where beginners can practice trading the S&P 500 futures without risking real capital.
  • Alerts and Market Updates: Brokers provide real-time alerts and updates on economic events, which can help traders make informed decisions. These updates keep traders aware of relevant news, economic indicators, and potential market-moving events.
  • Supportive Customer Service: Brokers with knowledgeable support teams offer personalized advice and solutions to help new traders avoid costly errors. Customer support can clarify platform features, order types, and any specific questions about S&P 500 futures.

Importance of a Broker with High Ratings and Strong Regulatory Trust

Choosing a broker with a solid reputation and strong regulatory standing is vital for futures traders. Here’s why a broker with 5-star ratings on TrustPilot and Google, along with a robust regulatory history, matters:

  • Enhanced Trust and Reliability: High ratings from review sites like TrustPilot and Google signify that the broker has built a strong reputation with its clients. Traders want peace of mind knowing that their broker provides reliable service, secure transactions, and a stable platform.
  • Transparency and Accountability: Regulatory oversight ensures brokers adhere to standards that protect clients. Brokers with a reputation for strong regulatory compliance offer additional layers of safety, like segregated client funds, insurance protections, and fair practices.
  • Better Customer Support and Responsiveness: A highly rated broker is more likely to have responsive and effective customer support, which is crucial for resolving issues quickly. Trading is time-sensitive, and having access to prompt support can make a difference.

Defining Characteristics of Legacy Futures Brokers

Legacy futures brokers—those who have been around for decades—offer a wealth of knowledge, experience, and insight that newer brokers may lack. Here are some characteristics that set them apart:

  • Historical Market Knowledge: Legacy brokers have weathered various market cycles, from bull markets to crashes. This experience gives them unique insights that can benefit traders, especially during volatile times in the S&P 500 futures market.
  • Established Relationships: Legacy brokers have long-standing relationships with exchanges, clearing firms, and regulators. These relationships often translate to smoother operations, faster execution, and better market insights for clients.
  • Deep Understanding of Risk Management: Having been in the industry for years, legacy brokers understand the importance of risk management. They have seen how poor risk management can lead to devastating losses, and they use this experience to guide their clients responsibly.
  • Reliable Infrastructure: Established brokers have invested in robust, stable trading platforms capable of handling high volumes and volatile market conditions. Their infrastructure often includes advanced features, such as algorithmic trading and comprehensive market data feeds.
  • Commitment to Client Success: Legacy brokers typically focus on building long-term relationships with clients, rather than prioritizing quick profits. They understand that their reputation depends on helping clients succeed, and they often provide personalized service tailored to each client’s goals.

The E-Mini S&P 500 futures contract has cemented its place as one of the most widely traded financial instruments, appealing to a diverse range of market participants. Stock indices like the S&P 500 offer traders access to broad market exposure, high liquidity, and efficient hedging opportunities. Brokers play an instrumental role in facilitating these trades, providing support, education, and the necessary tools to help traders succeed.

For retail traders, institutional investors, and hedgers alike, choosing a broker with a solid reputation and a strong regulatory background is essential. Avoiding rookie mistakes and understanding risk management are crucial for anyone looking to trade S&P 500 futures. Ultimately, a broker with experience, high ratings, and regulatory trust offers an invaluable foundation for responsible, successful futures trading. With the right broker by their side, traders can confidently navigate the opportunities and challenges of the S&P 500 index futures market.

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

Markets Hold Breath: Elections, Iran Tensions, and FOMC Decision Awaited

Posted on by Ilan
Join our Private Facebook group

Subscribe to our YouTube Channel

Listen to our podcast: Subscribe on Apple, Spotify, Amazon, or wherever you listen to podcasts!

C104

 

Equities, US Elections, Iranian Threats and FOMC week

By John Thorpe, Senior Broker

 

Today, Equities rallied on ultra light volume.

When “volume is light and prices are up,” it indicates a situation where a price is increasing, but with a relatively low number of contracts being traded, suggesting limited investor enthusiasm or potential weakness in the price movement, as a strong trend usually coincides with higher trading volume.

The reasons for light volume could be associated with several factors. Last week investors sold off on high volume; money still sitting on the sidelines waiting for the results of the U.S. Elections. Many FCM’s have increased their day trading margins to the exchange initial requirement for overnight positions. This restricts liquidity, today’s action smells like potentially a short covering rally, more cash on the sideline. What I expect, post election for the initial strong price movement to be a head fake, the wrong move for the longer term trend and must be faded. For Risk managers during this time, caution abounds.

Not only is the world watching the U.S. Presidential election, we can’t lose sight of which party takes control of congress, Republicans are expected to win the Senate and Democrats to win the House, These winners will play an important role determining how the winner of the presidency will likely govern.

If you hadn’t heard , The Ayatollah has issued a fatwah Crushing Isreal and the US after the U.S. election.

“The enemies, both the U.S. and the Zionist regime, should know that they will definitely receive a tooth-breaking response to what they are doing against Iran and the resistance front,” Khamenei said. The chief of Iran’s Islamic Revolutionary Guard Corps, General Hossein Salami, echoed these sentiments by stating Iran “will give an unimaginable response to the enemy.”

In addition to the above, all markets have already priced in the expected .25 decrease in the fed funds rate this coming Thursday.

If you are on the sidelines, waiting for margins to resume to normal, we appreciate your patience, Hopefully, this will be a minor disruption, as will all the above with your trading plans.

 

 

stars

Daily Levels for November 6th 2024

7e9e43ee 5641 42ba b110 1c084721fb0a

Economic Reports
provided by:ForexFactory.com
All times are Eastern Time ( New York)
46a6a6dc 4930 4d3b 81c8 15721beed7a7
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.
Contact
S
Cannon Trading Company
12100 Wilshire Boulevard
Suite 1640
Los Angeles, CA 90025
(800) 454-9572
Follow Us
Facebook  Twitter  Instagram
Visit Our Website

 
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.