 Hello, good evening everyone. Welcome to all traders investors and everyone joining in this evening. We want to thank tick mill for having me start their webinar series to the futures market. My name is Ali Hmedi based out of Beirut Dabran and I'm happy to be here to kick off the series to introduce the world of futures and how they're used and how they can benefit and enhance your investment strategy and portfolios alike. I'm a professional myself I've been in the in the investment management and portfolio management and investment banking business for 18 years now. And I couldn't be happier to be part of what tick mill is doing and the growth that they're going through, and the introduction of what they're doing within their futures contracts platform and investment allocation and opportunities. So when we started, what we want to do is be very very clear with what futures are the futures products what they are what you know it's very basic the webinar series is going to be a culminate it's going to culminate across eight nine maybe even 10 webinars, each one becoming more and more advanced as we get through tonight is going to be, like I said an introduction to what futures are used for how they were created, and give you a little bit of insight on and thought process on how you can incorporate them within your investment portfolio and strategy, according to what you're doing within your own portfolio. That being said, once again good evening and welcome to all across the Middle East in the world that are tuning in. I appreciate your time and I hope I can give you a little more insight as to what this sector has to offer. I'm not going to be the professor type. I'm not going to read every slide word for word and and and expect you just to listen because that's not how I operate. I'm going to treat you as my client I'm going to speak very candidly. I'm going to speak openly, and I will go over the slides and an illustrative verbal way, and we can have any questions that you may have we can answer those at the end for within the q&a section. That being said, kicking off tick mills future webinar series, part one of several. What are futures and how they are used by definition. This is basically the only slide that I'm going to read word for word so that you can understand verbatim what it means futures are derivative financial contracts that obligate I've highlighted obligate because that is important to know. They obligate parties to transact an asset at a predetermined future date and price. The buyer must purchase, or the seller must sell the underlying asset at the set price, regardless of the current market price at the expiration date. Underlying assets include physical commodities such as oil and gold or other financial instruments such as indices like the S&P 500 for instance interest rates us treasuries for instance, fx. No further no further explanation for what fx is futures contracts detail the quantity of the underlying asset and are standardized to facilitate trading on a futures exchange. Now, what are they, when you hear someone says the word in futures and finance. It's a contract. Basically, you are binding yourself to a specific time in the future at a specific price for an underlying asset or financial instrument or commodity. And the value of that contract is derived from the value of where it's coming from futures require the contract holder to settle the contract, which businesses corporations farmers, you know, from an agricultural sector. They will deliver the final product at the delivery date in physical form. In the investment trading world futures contracts will be settled via cash settlement, meaning the difference at the end when the when the expiry date comes up. If your contract is in the money, you will be paid in cash. If it's out of the money, then you'll have a margin call, and you'll have to pay that money. You can buy or sell futures contracts at any time the contract that you're agreeing to pay on the price is only specific date, and each specific underlying futures contract will have a specific date mentioned for the underlying asset for which month and which year. This is an envy and it's an investment vehicle. Let me put it this way when you're building a portfolio. You have different asset classes, you have stocks, you have bonds, you have options, you have commodities. You also have futures futures are from an investment perspective are highly utilized at a higher level of finance. Once we get into the retail world, where what we're introducing to tick mill and its clientele is how we're able to utilize what higher level finance just call them people or investment specialist use futures how they're able to utilize them to help them guide and protect their management of the portfolio. That being said, these futures contracts they trade on organized exchanges. The six exchanges that I've listed here, the CME, the Chicago mercantile exchange, the Seabot Chicago Board of Trade, NYMEX, New York mercantile exchange, Comex the commodity exchange, Eurex the European derivative and the small exchange. These exchanges are all connected to your broker dealer or broker like tick mill in this example. And these contracts are popular among traders who aim to profit on profit swings, as well as commercial customers who want to hedge their risks. That's getting back to what I mentioned earlier. Now when we talk about this, this writing might be a bit too small here but understanding what futures do these contracts are traded on the exchange through an exchange through your broker, and they they have standards that must be followed. And these standards are very straightforward and simple for every single one of the specific contracts that you would be involved in. These contracts dictate how trade would be settled between the two parties on the contract. Like I said earlier, these contracts will all be settled via cash settlement for the most part on a retail level. These contracts are standard with standardized futures contracts were able as investors to speculate and or hedge pending on the size of your portfolio on the future value on any asset traded that you find or that you would need to invest in over the short over months or upcoming short term and able to either hopefully profit from the the the investment that you're wanting to to gain from. Now, when you look at from a hedging perspective. When parties get into contracts to hedge positions what does hedge mean hedge means. Okay, I am long the S&P 500 meaning. Invested meaning I want the S&P 500 to move up what's happening in today's world in time. Specifically as we're talking right now I'm looking at my screen, the markets down again today. The Dow is down 707 points as I speak right now. We have geopolitical crisis with Ukraine and Russia. We have an increase, a very sudden increase in spike in oil prices that oil right now as I speak is trading at 105. We have before the Ukrainian and Russian geopolitical crisis. We had what inflationary we have the highest inflation and 40 years and the United States market it's over 7%. And Wall Street talking about anywhere between four or five maybe even six interest rate hikes this particularly in this particular year for 2022. So this opens up a wide range and a wide spectrum and opportunity to engage in futures contracts, you got interest rates, which is possible with us treasuries. Modities, which is possible with oil. You've got the geopolitical tension that can move gold gold is also up as we speak right now gold is it is up 34 points trading at 1934. And then you also have what's happening in the markets, what's going to happen when the interest rates hike, are they going to hike now with the geopolitical tension, are they not. There are all reasons for you as an investor to do a little bit of research based on your portfolio based on your sentiment. It's going to finish quickly. It's not going to finish quickly. These are all questions that I don't know. This is what makes markets. No one knows what's going to happen between now and the end of the year where the S&P 500 is going to be where oil is going to be where gold is going to be where the interest rates are going to be. This is a prime, prime, prime opportunity to learn, understand, and engage in futures, either on a speculative basis, or to hedge your portfolio. If you have a big portfolio and you have overweight exposure in certain sectors, this is a perfect opportunity it's a perfect sector it's a perfect instrument to use to utilize and benefit from. Now, traders and investors use the term futures in reference to an overall asset class. Right now, like I just gave you what's happening in the world as we speak today there's a lot going on. So many, so many variables so many moving parts market moving up mark market moving down, why can they say it's only because of Ukraine and Russia love, can they can they only say it's because inflation is at its highest rate in the United States the world in the last 40 years love, can they say it's because the Federal Reserve is going to raise interest rates love, it's a combination of many variables. So you have different sectors within the futures market that you can get into your talking commodities you're looking at crude oil natural gas to agricultural corn wheat. So what happens in in a natural disaster. Does anyone know when a natural disaster is going to happen like a hurricane muscle on a horrible let's say, elongated winter that we're not able to to to ferment and toil the soil and get it for the upcoming harvest, so that we can plant and harvest and expect what we want to reap in at the end of the harvest season. She that's also an unknown. That's why futures are there. You also have indices stock indices for the S&P 500 but the digital but the tens of we've seen the volatility. Let's just look at a spore. Just look at the last week how much volatility we've had just in the S&P 500 alone currencies. Prime example, everyone is trading currencies that's the largest market in the world outside the fixed income market, the bond market. You're talking euro us dollars sterling the one, etc. What's going to happen to these currencies, do you think the euro is going to go up. Because of what's happening in Ukraine and Russia. It's a speculated speculative play, depending on your portfolio, how much overweight, how much, let's say, risk or how much exposure do you have to specific currencies, metals, gold, silver, uranium, platinum, etc. In the interest rate markets, everyone's talking Wall Street, four to five, maybe six interest rate hikes. How are you going to hedge, how are you going to be able to protect yourself in situations when they are out of control, or the variable is very volatile like it is now that the one in one word, it's futures. Very simple diagram. You have traders like yourself like myself, we have investors like yourself like myself, short term long term retirement planning, day trading, investment trading portfolios. There's traders of all sorts. And they get in all in all sorts of sectors, difference in indices, European indices, United States indices, different types of commodities, they all end up having a broker tick mill prime example, that's our broker. We want to engage in futures. We want to be able to hedge or we want to speculate and say, you know what, I said one, two, three, I'm the seer. I, there's an offer to help me with 50. Let's go ahead and get involved in a futures contract. You deal in with your broker tick mill. The beauty of futures is you don't have to come up with the large sum of capital for the full contract. You can purchase it on margin. It's a fraction. Each, each future, each specific sector within the futures market has different margin requirements, which is a small percentage of each contract needed. So, so, so, on margin, and you've protected yourself, whether hedge or speculation in the futures market, and tick mill then takes it to, you know, those exchanges that I just mentioned in the previous slides, CME, Seabot, Urex, Urex, et cetera, et cetera. All right. Question. Is it a derivative? Yes. Futures are derivatives. But what does a derivative mean? Derivative is not a scary word. I don't want anyone here to be scared of what the word means. Derivative is a financial term. And a derivative only means is a financial instrument, financial asset, based on or backed by a specific asset class. Just like options, I'm sure most of you have heard of what options are and how they operate. That's also a derivative. Futures are also a derivative. Difference between futures and options, options give the investors the option to either exercise or not exercise their strike price. My futures. It is what it is. It's an obligatory contract. You buy the contract or you sell the contract at a specific price in a specific month at a future date and upon expiry. At a time up until expiry, the volatility of the market will either increase the value of your contract or decrease the value of your contract until the expiry date. But the beauty of futures, you can close your contract at any time. It's your loan. You bought a contract. And you're happy with your gains and you don't want to wait until the expiry date. You can take the opposite and close your position and sell. You take the profit off the table. You want to wait it out till expiry date. If you're in the money, they settle the cash settlement directly into your account. If you're out of the money, it's a margin call. You got to settle off. What happens if you hold the futures contract until expiry, until expiration or expiry date? I just mentioned, they will look at the price based on the contract that you own, whether you bought or sold your contract. The contract that you own, the loan. At expiration date, what do you own? You have a loan or a loan. A loan as a settlement, it will hit your account. A loan, you've got to settle with the broker. Very simple and straightforward. Now, this is where you have to be careful. Because futures are a specific asset class and because they involve large sums of money per contract, regardless of the asset, whether it's gold or oil or indices, interest rates or FX, etc. Each one of these contracts, one contract, for oil, each contract is based on 1000 barrels of oil. Like right now, it's trading at 104. Let me just check now where oil is to give you a better idea. The oil right now is at 106. It's already up a point during our webinar. It's going 105.5 to 106.5. Okay, that's a lot of money. So there is margin involved. This means leverage. If you're dealing with leverage, you have to be very careful, because you can amplify. Amplify, I mean, if you have a margin call, that means the market has moved against you. And in order to keep your position, the broker is going to call you. And then you're going to say, Ali, do you want to keep your position? If you're going to keep your position, you need to make this margin call in order to keep the contract viable or live active in the market. The amount held by the broker in the margin account can vary depending on the size of the contract and the credit worthiness of the investor. The credit worthy of the investor. Basically, retail level is the board the same for everyone. Well, when you're dealing with larger corporations, Shedekit, conglomerates, manufacturers on a larger scale, this particular margin is going to vary. And depending on the size of your company and the size of your account with your broker or your broker dealer will allow. But across the board, but it could be the exchange where the futures contracts trades will determine if the contracts. Now, I'm talking when we're talking about physical delivery or cash settlement. For the most part, everything that we're talking about tonight will be cash settlement. But when you talk on a larger scale, when we're dealing with futures with farmers that are harvesting wheat or corn or pork belly or cattle for whatever reason. When they have their harvest season starting, they have to forecast at the end of the year whether they're going to make money or lose money. But they can't harvest and then hope what they take to market will sell at a higher market price than what it cost them to produce and harvest what the burden is that they were producing. So what do they do they go and they engage in a futures contract, but the difference between them and us as investors managing our own investment portfolios or trading portfolios is that they have a physical delivery. One in expired expired date comes before the harvest season they've already signed in on a futures contract at a specific price. If the market has moved up higher than the price that they agreed on, they lose out on that difference and they have to physically deliver. Even though they've lost, they still have to physically deliver whatever it is that they are supposed to deliver. But in our case, for the most part, middleman is cash settlement. Again, futures, basic and a basic sense, you have two reasons to use them. You can either speculate. I think oil, for example, it's moving up. Can it reach 150? I don't know. Let's say I think it's going to reach 150 between now and the end of the year. I think what's happening with Russia, Ukraine and Tauvali, it's already up a point in less than 20 minutes just today. Okay, I'm going to speculate and I'm going to buy a futures contract and I think it's going to hit 150 by the end of the year. Each day, each passing day between now and the end of year, if my contract is expiry date is in December, you're looking at an increase in value of that contract. I can either hold it until the end and wait it out or during the course of the year as it fluctuates in price and moves up in my favor. Once I'm happy with the profitability rate, I can close it out and take my profits off the table so I can use it from a speculative perspective based on what's happening around me. Like I said, right now, is Suhami from all perspectives, volatility in the stock market, volatility in the interest rate market, volatility in the commodities with oil specifically based on geopolitical tensions, gold, it's prime, there's many opportunities to look at from a speculative perspective. At the same time, they're used for hedging. You can look at your current portfolio for those that buy and hold for those that have larger portfolios the ones that look at a longer term perspective on the horizon, knowing that with information, if you had put $10,000 in 1940 in the S&P 500, you would have over now $3.5 million worth in the S&P 500 in the span of what, 78 years, and you're talking about from the end, or actually during the beginning of World War II, all the other wars that took place, the oil crisis in 70s. The dot-com bubble in 2000s, the S&L crisis in the early 90s. The housing bubble in 2008. All of those major quote unquote crises that everyone panicked and was worried about in the portfolio, the stock, the Black Friday stock crash of 25% in one day back in 1986 or 87. People panic selling, with all that being said, if you put $10,000 in 1940 into just the S&P 500 index and just let it sit right now with values over $3.5 million. These types of investors that have larger portfolios that have bought quality stocks or quality positions or a well-rounded diversified portfolio depending on what their interest is. Futures is a prime opportunity for you to take in times of uncertainty like now to take positions to hedge in case of the moving against you in whatever sector you may be. How to trade futures. We're going to have, as I mentioned at the beginning, this is the first of several webinars in tick mill series on how to trade and understand what futures are. How to trade futures. We're going to get as we get into next week's seminar and the following seminars that come afterwards. We'll be getting into more details as to how to value them. How to understand where the markets are moving. How to speculate. And when not to speculate. We can answer as to what's going to happen in the market, but we can see that the market is having trouble at the moment. So we can say speculatively, market is in a recessionary corrective territory right now, can it continue to slide. How can I trade, how can I get involved using futures as a tool, not only to protect but at the same time to trade as part of my portfolio and be profitable. We can gain access through tick mill. We trade at tick mill, they trade futures, among, among other investment classes from fx to stocks to bonds to commodities options futures now included. Getting started. This is the purpose of this webinar, understanding what futures are and my listen to him from now, my free hope, as long as you understand information is powered. Is the entire fan show my net what you're investing in, then you're going to have more confidence. And taking that step forward. But had an busy. You go back 10 years ago had an alec bitcoin. I'm an exponential he bitcoin. I'm an exponential he cryptocurrency. I'm an exponential he blockchain. Mahada not absorb. This is a feeling and it's a little water. I just mean, who would not buy bitcoin. Mahada, everyone would buy it, everyone would get involved in it. These are the types of where power is in the information understanding the power behind futures. How they can help what you're doing, how they can enhance what you're doing, how they can hopefully make you more profitable at what you're doing, because of using margin, using the leverage, being able to get involved in larger contracts with large assets, large asset sectors, and being able to hedge and or speculate according to your needs. Once you've made that first, let's say, I don't want to say trade, but that first venture once you've taken that first step through the doorway into your first futures contract and get a real essence and fear, that's the best of how it moves and you're able to see in your account, the value of an increased decrease on a daily basis. Hassab keep this so I'm thinking will give you more clarity, and at the same time, more confidence as to what you should and or shouldn't be doing when it comes to your portfolio. Futures are not scary, but once you understand them, the purpose of what we're doing in this series is to get you more comfortable, to get you more knowledgeable, so that you can with confidence say you know what, but I now know more what I can do with futures, and I know how I'm going to use them and I know why I'm going to use them. You're going to win some and you're going to lose some. This is the market. This is what makes markets. But if you have a strategy in place, what you're doing with your portfolio, futures is an excellent opportunity to enhance and protect at the same time, but your overall. I'm going to give you an example. I'm going to read from the screen. So, like I said, I'm not that type that likes to read word for word, etc, etc. But let's take an example here. I'm just to speculate on the price of crude oil and enters into a contract starting in May. And at that point in time, he says you know what I think oil is going to increase by the end of the year so he ends up taking a December contract, a futures contract that expires in December, and the value is at $50 of the contract in May. Okay. Remember, I told you the per contract when it comes to crude oil, it's 1000 barrels. So the investor now has a position of $50,000 worth of crude oil. Now the trader will only need to pay a fraction of that upfront with the initial margin, which I mentioned earlier, Hassab broker, Hassab, what the individual broker that you deal with. Take mill, hopefully, you'll be able to get will be able to get into their rates in future series as well. But you will have to come up with a more which is a fraction of the cost you're not going to have to pay the $50,000 to take this position. But throughout the year. It's going to have this type of movement throughout the year, but depending on the trend. I'm thinking, but that it last so I'm hoping the trend is going to be moving up this way, instead of the volatility down this way. So what the trend is futures contracts they expire on the third Friday of every single month, depending on the month of the contract that you have in this particular example, December so be the third Friday of December. Now, we get to the third Friday of December we look at where the price of oil is. He's got a contract to buy it 50. Well, it's risen to 65 in this particular example. Math, they take 65 minus 15 it's $15 times 1000 leash because it's 1000 barrels. That's $15,000 net profit to this particular traders account. But at the same time, you have to run the risk. You can not do that. You can easily. And when it's lit with that to let the $65. It's a nice little are being a lot of me will be December. Simple math are being not as come seen. I think it's $10 negative. Your negative $10,000. This just gives you a view chart of it. I want you to focus only now. If you look at the red line, the red line is when it started at $50. And let's just say the red line between May and December is the volatility of its ups and down throughout the year. Okay, the blue line is your contract. You bought it. Okay, too late with my luck to $65. There is your profit. There lies your profit. The yellow line is if it comes to expiry in December. And it's lit. Oh, I'm in $50. So you can see just in a very basic simple chart the volatility would be. I don't want to say much choppy, but it will be more volatile than this type of example that you see on this chart. I wanted to keep it simple from a visionary perspective that you bought a contract at 50 in May, expiry date in December, you're giving yourself a good seven months to let the volatility play out hopefully in your favor to suddenly December. Hopefully it's higher than $50. You profit on it. If it's lower you lose on it, but look at this chart also from a different perspective. During the course from May until December. At some point in time. When you bought it at 50. It went below 50, even though in December it reached $65 at during the course of the year, can it all time at $50. Maybe you panicked, and you decided to sell. This is why I personally, I'm against panic selling panic selling. It's not healthy. If you panic sell that means you entered and an engaged in an investment, one that you were not knowledgeable of, or comfortable with, or didn't quite know exactly what it is what you're doing, and when you see the price of it drop, you panic, and you sell. Again, it goes back to that's what makes markets do what they do. This was a screenshot today from Yahoo of what the options are not options as an option contracts but options as in varieties, variety of futures contracts, starting up at the top. You got the S&P 500 E mini. You got the NASDAQ, you got the Dow futures, you got the S&P VIX VIX is the volatility index of the US dollar. You got the 10 year treasury, which is the interest rate links to interest rate, you got crude oil, the WTI you got natural gas you got gold silver, coin wheat, corn wheat, soybean sugar, etc. You see the depths of what the futures markets provide and why they're there wheat and corn who goes and buys wheat and corn, you buy wheat and corn in bulk, you buy crude oil in bulk. You buy all of these other agricultural, let's say products and bulk, but if you are a manufacturer or a farmer, how do you protect yourself. You go to the Chicago Board, the Chicago Mercantile Exchange or the Chicago Board of Trade, you enter into a physical delivery futures contract. All of the futures markets are created. This is where it originally started. So you can see the depth. Variety Shufi Mojout. Now, we are going to be able, they're going to be able to provide you to different varieties as well. The pros and cons, pros and cons of getting into a futures contract or not, you just need to understand the goods and the bads futures contracts. They are, they speculate on the direction of the price of the underlying asset, the con to that, it can move against you companies hedge their price which we discussed raw materials. What's the con against that is that maybe the market needed more demand than they thought, and they end up losing on the price value of their commodity. The futures contracts require the positive of refraction, which is a positive you don't have to come up with the full $50,000 muscle on the head the example that I take a few slides earlier. The downside to that is, is the suit and is in, you may have a margin call. It's easy to speculate. I think the S&P 500 it's going to continue to go down muscle. And I wanted to continue to continue to go down. Take a futures position and let it go down. It could be a rough year. Sensitivity to come to that is to it can go the other way. Pricing simple pricing, it is what it is the price of the contract is there you take it or you leave it you take me pick the month. We'll get into all those details when it comes time liquidity, liquidity is very deep with the exchange. You have so many brokers linked to these exchanges, liquidity is there. There's never going to be a liquidity issue when it comes to these. The only problem when you come to liquidity is expiration. When it comes to expiration, you may have taken the right position but you didn't have enough time for it to come to fruition. It may expire before your vision or your thought would take had taken place. Leverage we've already discussed, and it's an easy way to hedge your portfolio. I know I'm going a little overboard on the first introduction but the key takeaways here we're at the very end now. Here futures are derivative financial contract obligations or obligating the buyer to purchase an asset or the seller to sell an asset at a predetermined future date at a set price. The contract allows an investor to speculate on the direction of a security or commodity or any type of financial instrument. We're going to use the hedge price against price movement of the underlying asset that they may be already involved in to prevent losses in unfavorable markets or price changes. The settlement of these futures contracts with tick mill, like I said earlier our cash settlements. So no physical settlement will be a problem you're not going to end up if you forget to close your contract out, having 1000 barrels of oil show up at your doorstep. That's what I just said, no physical delivery. So that's not a problem. Last but not least, a few a quote from Carlos, slim hello, who is a Mexican Lebanese businessman considered the richest man in the world in 2010 through 2013 by Forbes business magnate is quote. With a good perspective on history, we can have a better understanding of the past and present, and thus clear vision of the future. I'm going to leave on that note. And if anybody has any questions I see a question here. I have some raised hands, and I'm going to see what I can get to I might not be able to get to everyone because I promise tick mill I would stay within 20 to 30 minutes and I'm already 45 minutes in. So if you've been with me this long I appreciate your, your interest and your ears. And let me get to what we have here. I have the PowerPoint slide by email. Yes, I can email this to you pending on tickmail I'll clear that with tickmail before, since I don't work directly with tickmail as an employee. Will the recording be available yes tickmail has told me that there will be a recording available on YouTube so you'll be able to come back. Rewind and listen to any parts that that you may not have understood, or need to listen to again to get to get better clarity. See anyone else anyone else has any other questions please go ahead otherwise. I'm just popped up. What about giving up the contract. Like I said earlier, Muhammad. This for everyone. You have the contract. At any point in time fix it up. To expiration date. There's, you can close it at any time. Just know that during the course of the timeframe, during the course of the timeframe, the volatility of the markets going to change the value of your contract. If the volatility of the market moves your contract and it becomes more profitable for you and you're happy with the profits at that point in time, and you don't feel like waiting till expiration date fix it up. Can we get this speech in Arabic. John. I really worked hard to where I can get to the point where I can communicate and have business conversations in Arabic. English is my first language. But let's say. That's a faster. Is a. Is a. Is a. Is a. Is a. Is a. Is a. Is a. Is a. Is a. Is a. Is a. Is a. Is a. Is a. This is the first webinar between 10, and we have a long period of this because this sector is very important, and this sector has a lot of opportunities, and a large opportunity, especially now, in this situation that is very important in the situation. To return to this matter, America with interest rates, inflation, and the Russian-Ukrainian situation, the financial situation, there are a lot of things at the same time, a perfect storm if you want to call it in English, which is happening now in the financial markets, and now there are a lot, a lot, a lot of opportunities, especially with futures contracts. Okay, looks like that's it. That's it. We honored you, and I want to thank you very much, and I hope to see you next week. Next week will be the second webinar in the futures webinar series, where we have 10 or 10 webinars, and every time we go into detail, more and more and more details. This was the introduction, what are they, how can we use them, why, and what is the reason, of course. And this is from the end. Good luck. We honored you, and I hope to see you next week. Let's see if there's anything else. Good luck, and good luck with your training. If you have any questions directly related to me, please get in touch with Tick Mill. Tick Mill will guide you directly to me. I'm in direct contact with them, and I will be able to get in contact with anybody, specifically if they need. Just follow through, and have a great evening.