What is Futures
Futures is a contract buyer and seller to buy the underlying commodity at a certain price to be delivered on an agreed in the future.
Forex & Precious Metals
The Foreign Exchange Market or Forex is one of the largest, most exciting and fastest-paced market in the world. What is trading Forex? Trading Forex is essentially trading the value of one currency based on another currency. For example: trading the USD/JPY or USD/EUR.
Here are the key advantages of trading Forex :
- High liquidity; it is the most liquid market in the world because there is always a constant supply and demand for money.
- Two-way profit potential. In the Forex market, profit potential exists in both rising and falling prices since there is no restriction for directional trading. That is, you can buy a currency if you think it is going to appreciate in value or you can sell a currency (without acquiring it first) if you think the value will depreciate.
- Relatively low initial cost of investment as Forex is traded on leverage. With leverage you can buy or sell up to 500 times more than your capital investment, which allows you to generate substantial gains (or losses) even without having a large capital at your disposal.
- Transparency: you trade directly with the market responsible for the pricing of the currency pair.
- Low cost of trading as the trading fee is calculated into the spread.
Precious metals, particularly gold and silver, are highly sought after as alternative investments as they were considered ‘safe-haven’ assets. Usually in times of high inflation, gold and silver prices would go up due to increase in demand.
Here are the key advantages of trading precious metals :
- High liquidity as there is always constant supply and demand for these metals both for investment and for use.
- High volatility in prices which gives ample opportunities for substantial short-term profits/losses.
- Two-way profit potential. When trading precious metals, profit potential exists in both rising and falling prices since there is no restriction for directional trading.
- Market is open almost 24 hours on weekdays so you can trade at your convenience.
Crude Oil is the raw material that is refined to produce gasoline, heating oil, diesel, jet fuel and many other petrochemicals. In short, it is a major source of energy in the world.
West Texast Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing andit is the underlying commodity of New York Mercantile Exchange oil's future contracts. It is traded using the symbol CL.
Here are the key advantages to trading Crude Oil :
- High Liquidity; it is a very active market and well known with investors around the world
- There are abundant short-term profit/loss opportunities as Crude Oil can be a very volatile market. The Crude oil market is very sensitive to news.
- Relatively low initial cost of investment as Crude Oil is traded using leverage.With leverage, you can buy/sell CL up to 500 times more than your capital investment, which allows you to generate substantial gains (or losses) with a relatively small capital.
- Crude Oil is a limited resource, once the world's supply runs out prices are bound to increase.
Stock index futures are futures contract on a stock or financial index. Valbury offers futures contracts on major Asian indexes such as Kospi, Hang Seng and Nikkei 225; as well as US indexes such as NASDAQ, Dow Jones and the S&P 500.
A stock index is comprised of stocks from selected multiple companies and therefore cannot be traded directly (no ownership of a stock index certificate). One way investors can trade stock indexes directly is through the futures contracts.
Here are the key advantages of trading stock index futures :
- Stock Index Futures provides investors with the opportunity to invest in a stock market without purchasing the shares directly.
- It is a very liquid market; contracts are traded in huge numbers everyday.
- Two-way profit potential. When trading stock index futures, profit potential exists in both rising and falling prices since there is no restriction for directional trading.
- Futures stock index market are more efficient and fair than trading stocks directly because its difficult to trade on insiders information in the futures market.
Aside from Over the Counter products (Forex, Precious Metals, Crude Oil and Stock Indexes), Valbury also offers Futures contracts based on commodities that are traded through the Jakarta Futures Exchange (JFX) and the Indonesia Commodity and Derivatives Exchange (ICDX).
As these contracts are traded through the JFX and the ICDX, they follow the Indonesian operating hours and the underlying commodities are usually local commodities such as Olein (CPO), Gold, Coffee, Chocolate, etc. These contracts are not as liquid as the Over The Counter products; however they serve well as an alternative investment or as a way to hedge your investments.
The Futures market provides plenty of opportunity for investors but also plenty of risks. Before you trade, you can learn about the basics of trading Futures in our education section.