Professional Documents
Culture Documents
Kansas City Board of Trade
Kansas City Board of Trade
Kansas
KansasCity
CityBoard
BoardofofTrade
Trade
What are futures and options?
A contract to make or take delivery of
a product in the future, at a price set
in the present
In formalized futures and options
trading on exchanges, standardized
agreements specify price, quantity,
and month of delivery
Started in agriculture, but have
expanded to a wide range of products
Example
Risk Transfer
Price Discovery
How does trading futures and
options work?
Similar to stocks, gains and losses
are the result of price changes
How does trading futures and
options work?
Futures can be highly leveraged
Options risks differ depending on
position
How does trading futures and
options work?
A number of factors
to consider including
account type,
trading style
Traded through a
registered broker
K.C. Isgreat: A simplified,
hypothetical trading example
Do your
homework
Choose a broker
Enter into an
agreement
Make your first
trade
K.C. Isgreat: A simplified,
hypothetical trading example
The first trade….
K.C. Isgreat: A simplified,
hypothetical trading example
Futures
Transaction
Sell futures 950.00
Buy back futures 939.00
Total Return 11.00 11.00 x $100=$1,100