Hedging and speculating through futures trading
StoneX’s expert traders pair deep understanding of global market dynamics with local intelligence to help our clients protect margins, manage volatility and increase profits.
The StoneX approach to futures trading
The worldwide market has never been more competitive, volatile or complex. Learn why clients trust us to execute their trading needs.
Why trade futures?
Futures contracts help our clients manage the future price risk of commodities in their operations or investment portfolios. If you have an existing position in a commodity or stock, a future contract can protect unrealized profit and minimize loss in a moving market.
For investors and traders who do not own the underlying commodity, futures contracts allow them to express an opinion about and potentially profit from the direction of the market for a chosen commodity. Traders and fund managers utilize futures to bet on the price of the underlying asset.
Futures trading provides our clients with direct market exposure to underlying commodity assets that are not typically found in other markets. StoneX offers a wide array of investments including metals, interest rates, indexes, oilseed, energy, grains and livestock.
The required initial margin amount with futures is typically set between 3-10% of the underlying contract value. This leverage gives our clients the potential to generate larger returns relative to the amount of money invested.
Futures are standardized and traded on regulated exchanges and increase the underlying trading volumes as a whole. Higher trading volumes create more opportunities to enter and exit trades.
Consider options on futures
The StoneX futures team helps clients reduce portfolio risk by utilizing options on their futures contracts. This strategy enables our clients to diversify risk, hedge existing positions to limit risk or trade more volatile markets at a reduced cost.
What is futures trading?
A futures contract is a legal agreement to buy or sell a specific commodity asset or security at a predetermined future price and date. When a futures contract expires, the buyer is obligated to buy and receive the underlying asset, and the seller is obligated to provide and deliver the underlying asset at the expiration date.
How does futures trading work?
Futures contracts allow traders to lock in the price of an underlying asset or commodity since they have predetermined expiration dates and set prices. When entering a trade, the trader does not need to provide the total amount of the contract’s value. Instead, the broker would require an initial margin amount.
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To learn more about how our customized financial solutions can help you stay one step ahead in the global markets, contact our team today.
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The trading of commodities and derivatives such as futures, options, and swaps involves substantial risk of loss and may not be suitable for all investors. Advisory services as well as the trading of futures and options is available through various subsidiaries of StoneX Group Inc. including but not limited to the FCM Division of StoneX Financial Inc. Public Disclosures for the FCM Division of StoneX Financial Inc. The trading of over-the-counter products or swaps is available through subsidiary StoneX Markets LLC to individuals or firms who qualify under CFTC rules as an eligible contract participant. Please click here for the full disclaimer.