As an investor with many trading experiences in the stock market, you need to know about stock futures to help you find additional unique opportunities in your portfolio. In the following content, I will help you analyze the strengths and weaknesses of stock futures and traditional stocks to effectively distinguish them and make reasonable decisions.
I know that you are very familiar with the basic knowledge and concepts of traditional stocks. However, I may also need to remind you of some cautions about traditional stocks. As a stock holder, you will not only acquire part of the assets of the company to which the stock belongs, but you may also acquire the right to decide the development of the company. In addition, you can obtain interest income according to the trading agreements and income conditions stipulated by different companies during the period of holding shares. What I need to tell you is that owning stocks means that you can buy and sell stocks through traders or exchanges to obtain very rich profits.
I know that you are very familiar with the basic knowledge and concepts of traditional stocks. However, I may also need to remind you of some cautions about traditional stocks. As a stock holder, you will not only acquire part of the assets of the company to which the stock belongs, but you may also acquire the right to decide the development of the company. In addition, you can obtain interest income according to the trading agreements and income conditions stipulated by different companies during the period of holding shares. What I need to tell you is that owning stocks means that you can buy and sell stocks through traders or exchanges to obtain very rich profits.
After learning about traditional stocks, you need to start learning how to invest in stock futures. Stock futures are completely different from other securities you know before. In fact, when you buy stock futures, you can understand that you do not have any stock holdings. It seems that you are not a shareholder and have no corresponding dividend rights or interest income. You can understand that after purchasing stock futures, you start to cooperate with some companies to obtain a stock futures contract. You need to agree on the price and time with these companies trading stock futures. When you buy stock futures, you plan to buy real stocks in the near future. The purpose of your purchase of stock futures is obviously to help you reduce capital risk and stabilize your portfolio. For example, you can be in an advantageous position after buying stock futures and waiting for the stock value to rise sharply. Therefore, you can either buy stocks at a low price to obtain a large profit in the plan, or you can transfer stock futures to others to earn the difference.
One of the advantages of stock futures is that you can use the leverage principle in economics to reasonably arrange the margin investment. Investors who buy common stocks often find that the use of margin is not very efficient. What you need to understand is that in traditional stocks, the existence of margin means that you have borrowed a loan from traders. Therefore, you need to pay interest to the margin provider at each point in time. However, for people who buy stock futures, they only need to deposit a little money into these futures accounts to get margin.
Stock futures can even help you easily short a stock you need to buy. Different from the traditional way of short selling stocks, you don't need to buy a large number of stocks in advance. What you need to do is to short the trading contract between you and the company to avoid the payment of interest.
In conclusion, you need to consider changing your portfolio through stock futures. You will need to learn more about stocks to help you lay a good foundation and make profits through stock futures. The risk of stock futures is much higher than that of traditional stocks. You need to be prepared to bear possible losses.
