Trading Stock Futures

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As investors and traders concern themselves over the EU debt crisis prices rose in trading stock futures. One can trade futures on individual stocks. In doing so the trader does not gain or lose possession of stock shares or rights to dividends.

Trading futures requires a margin account making this a leveraged investment. Trading stock futures in the USA takes place through the all-electronic OneChicago exchange. In a stock futures contract the seller agrees to deliver 100 shares of a given stock to the buyer at the contract price on the expiration date of the contract.

Trading stock futures is similar to options trading of stocks in that the trader seeks to predict direction of stock price and then buys or sells based on his prediction. Unlike trading options in trading stock futures there is not option to execute the contract or not. In trading stock futures a trader need not hold the contract until the expiration date.

He can execute the opposite trade on the same stock with the same expiration date in order to exit the trade, hopefully with a tidy profit. Traders use both fundamental and technical analysis in order to predict stock prices in trading stock futures

A stock currently in the news is Boeing -- BA. The first 787 "Dreamliner" was delivered yesterday. The company has over 800 orders for this new technology jet at around $200 million each, depending upon which sub model an airline buys.

That comes to a cash flow of $160 Billion on just the first orders and just that part of Boeing's business. If the company can efficiently manage production of this groundbreaking airplane they could be very profitable. In trading stock futures on BA traders will need to assess the likelihood of Boeing making a handsome profit from this project.

Trading stock futures today is like trading stocks today. There is a lot of uncertainty and a lot of volatility in the market. The Eurozone debt problems play in the news like an old melodrama with news that the Greek default is averted alternating with suggestions that it will still happen followed by a default on Italian debt.

For all their faults the US economy and US Dollar are looking more attractive to investors. Thus futures on individual US stocks and stock indices such as the Dow Jones Industrials have gone up several percent. Traders expect to see higher US stock prices in the future and are trading stock futures accordingly.

As European debt crisis continues the exporting nations of Asia are concerned about decreased demand for their products and Asian stock markets are seeing falling prices. With the prospect of decreased investment opportunity in Europe and Asia the US Dollar resumes is place as a safe haven currency.

However, foreign investors do not simply purchase dollars. Futures traders buy and trade treasuries, bonds and stocks as well. In trading stock futures in the US traders look for stocks, like BA, that may well see exceptional growth in the future.

As with all trading profitable futures trading requires sound fundamental analysis and up to the minute technical analysis of the market.
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