Summary

Futures contracts are the first of the leveraged products that we are looking at in depth. They can be extremely powerful, although that power also translates as risk if you do not take sensible precautions. If you need to increase your profit potential, and are prepared to take the necessary steps to preserve your capital, then they are worth considering. But as they are a zero-sum game, with your gain being someone else’s loss, it is up to you to become more educated in the expected performance of the underlying than the majority of other traders.

There are ways, such as the spread strategy, to contain the risk. You need to take the interrelationships into account when position sizing so that you can trade reasonable positions but not risk too much.

At the end of each module there is a quiz. You can take a quiz at any point, but we suggest you view each module before taking the quiz. When you’re ready to start the quiz, click the take quiz ‘Start’ button below -: