In order to gain exposure to various financial instruments, like stocks, indexes, currencies and commodities, Stock Future are actually imitative contracts that obtain value from a financial asset, such as a traditional stock, bond or stock index.
Just because of the way Stock Future Tips are structured and traded, they have many intrinsic advantages over trading stocks. Just scroll through to know some of its key benefits.
Key Benefits of Stock Future Tips:-
(1) Stock Future are extremely leveraged instruments: First of all, an investor has to put in a margin, in most cases a fraction of the total value (basically 10 % of the contract value), to trade Stock Future. In circumstances where the market has moved opposite to the position you have opted for, and the broker suffer losses. To avoid this, a margin which is actually a guarantee, the investor needs to keep with their broker or exchange. But, if for some reason, it is more than the margin amount, the investor needs to pay more to bring down the margin to a maintenance level.
On the other hand, while you are trading futures following Stock Future Tips, the investor gets the freedom to expose them self to a much greater value of stock, than he could have managed while buying the original stocks. And if the market moves in his direction, their profits also multiply in substantial proportions (10 times if margin requirement is 10%).
(2) Stock Future Market is very liquid: Stock Futures are extremely liquid in nature, as Stock Future Contracts are traded in large numbers every day. Market orders can be placed quickly due to constant presence of buyers and sellers in the Stock Future Market. Especially for contracts that are near maturity, Stock Future tips necessitates that the prices do not waver dramatically. Thus, without any adverse impact on price, it becomes quite easy to clear out a large position.
(3) Low Commissions and Executions Costs: Commissions on Stock Future Tips are quite low, and are only charged when the position is closed. The total commission or brokerage, whatever you may call it, is as low as 0.5% of the contract value. But, obviously it actually depends on the level of service provided by the broker. While online Stock Future Tips may charge as low as 5$ per side, whereas full service brokers may charge 50 $ per trade.
(4) Faster Money can be made by speculators: As because with Stock Future Tips, an investor is trading with 10 times as much exposure than with normal stocks, a wise judgement can help them to make quick money in Stock Future, while following Stock Future Tips. Moreover, compared to cash or spot markets, prices in the Stock Future markets tend to move faster.
(5) For Diversification or Hedging Stock Future Tips are the best: For managing different kinds of risk or to say specifically, hedging, Stock Future Tips act as very important vehicles. To manage foreign exchange risk, Companies dealing with foreign trade, use Stock Future Tips, by locking in an interest rate in anticipation of a drop in rate, if they have a sizeable investment to make, and price risk to lock in prices of commodities that serve as inputs such as oil, crops and metals. Moreover, by lowering unanticipated costs of purchasing an asset outright, Stock Future Tips help to increase the efficiency of the underlying market.
(6) Stock Future Tips are more efficient and fair: In Stock Future Markets, it’s quite difficult to trade on inside information. Stock Future Tips tend to trade market aggregates that do not lend themselves to insider trading, unlike single stocks that have corporate managers or insiders who leak information to friends or families to shoo in a merger or bankruptcy. Thus, middle class investors can benefit a fairer shake, making the Stock Future Tips more efficient.
Thus, we can say that Stock Future Tips have a whole lot of advantages that make them alluring for all kinds of investors, Yes, large contract sizes or highly leveraged positions can make the investors vulnerable to huge losses, even for small movements in the market. Thus, it’s always advisable to go through all the pros and cons of Stock Future Tips and perfectly strategies and do due diligence before trading in futures.