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High-Powered Investing All-in-One For Dummies, 2nd Edition by Consumer Dummies

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Chapter 1

Futures and Options Fundamentals

In This Chapter

arrow Grasping the basics of futures trading

arrow Getting a handle on options trading

arrow Figuring out whether futures or options trading is right for you

Before you trade in futures and options, there's quite a bit you need to know. For starters, you need to understand what, exactly, futures trading and options trading are. Then you need to know how the futures and options markets work and who the major players are. And because trading involves speculating (more akin to gambling than investing), you absolutely need to know about volatility and risk. This chapter gives you just that kind of information. And because trading futures and options isn't for everyone, this chapter also helps you decide whether being a trader is the right move for you.

Getting the Lowdown on Futures Trading

Trading is not investing; it's speculating. When you speculate, you assume a business risk with the hope of profiting from market fluctuations. Successful speculating requires analyzing situations, predicting outcomes, and putting your money on the side of the trade that represents the way you think the market is going to go, up or down. Speculating also ...

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