Our e-book Trading Futures: Only One Way To Win is a treasure trove of futures information. In the book, we detail our revolutionary futures trading system: Securely Trading A Revolving Spread (STARS) as well as provide other valuable futures information. STARS is a system that moves independently of the market and generates predictable oscillations of profits. By trading closely related futures contracts in the correct ratio, you can make money whether the market goes up or down.

There is a lot of bad futures information out there that can mislead traders. Many websites will tout trading systems based on trying to predict the market's future. This type of system is fundamentally flawed because you can not successfully predict the future every time. Since our system can make money whether the market moves up or down, we do not need to try and predict the future.

Basic Futures Information
A futures contract is a legally binding document to deliver a commodity at some point in the future at a pre-determined price. For example, the May Sweet Crude futures contract indicates the seller of the contract will deliver 1000 barrels of Sweet Crude by the end of May to the buyer of the contract. To be released of this obligation a trader will simply place an offsetting trade, buy if you have sold or sell if you have bought.

There are two types of futures traders: hedgers and speculators. Hedgers are in the market to reduce the risk against commodity price fluctuations. They will have a specific interest in the underlying commodity. A grain or sugar producer would be a likely candidate for being a hedger. Speculators have no interest in taking delivery, or delivering the underlying commodity. They are simply in the market to profit from price fluctuations. They take the price risk hedgers are unwilling to take.

Commodities futures contracts are typically quoted on a per barrel, bushel, or pound basis. To properly value the contract you must know the specifications. The specifications clearly state how much of the commodity the contract covers. A sweet crude contract may be worth 1,000 barrels for example. The price quoted for the sweet crude contract would be on a per-barrel basis. To value the contract, you simply multiply the price quote by the 1,000. Each futures contract is valued differently, so it is imperative to understand the specifics.