Commodity Futures Trader

Archive for March 8th, 2010

The world of high finance is a world seldom visited by the uninitiated. Though the triumphs and monumental failures of Wall Street are well documented every day — either by radio or scrolling ticker on any number of news or financial television programs. We have become de facto fans of the market. When it rises, we are supposed to be elated. When it crashes, we are supposed to be mortified — and perhaps for good reason.

Thriving on a parallel plane, is the world of high finances that manages to avoid the glare of the spotlight while still enjoying a steady following. This, of course, is the world of the commodities future. To be sure, the futures market fails to garner the spotlight — and perhaps that is for the best.

Regulated via the Chicago Mercantile Exchange, the futures market follows the highs and lows of commodities. The trading is conducted in increments known as electronically traded futures, or e-minis. E-minis futures trading contracts represent a portion of the so-called normal futures. These portions are “papers” that are traded day in and day out. However, to obtain access to e-minis, you must ensure your margin for any specific commodity has been satisfied.

This means if your futures fall short on wheat by a margin of X, then you would be responsible for paying that margin before you could qualify for a new e-mini docket. For the sake of convenience, the e-mini has become the standard for futures trades. Of course, buying and selling e-minis requires a fair amount of skill and research.