Future Trade Are Really Liquid

Future contracts are traded in huge quantities every day and thus futures are very liquid. The constant presence of buyers and sellers from the future markets ensures market orders could be placed fast. In addition, this entails that the values do not fluctuate drastically, especially for contracts that are close maturity. Hence, a huge position might also be removed out very readily without any adverse impact on price.
1. Commissions and Execution Costs are Low
Commissions on future trades Are Extremely low and so are Charged when the position is shut. Even the complete broker or commission is usually as little as 0.5% of the price value. However, it's dependent upon the level of service offered by the broker. An online trading commission may be as low as per side, where as full-service brokers will charge each transaction.
2. Speculators Could Get Fast Money
Investor with great judgment may make rapid cash in
Stocks because basically he's trading using 10 times as much vulnerability than with stocks that are standard. Also, prices in the long run markets tend to proceed faster than in the bucks or spot markets. In the same way, there's also the chance of losing money. However, it may be lessened by using stoploss orders.
3. Futures are Terrific for Diversification or Hedging
Futures are very significant vehicles for hedging or managing different kinds of risk. Organizations engaged in foreign exchange use stocks to deal with foreign exchange risk, interest rate risk by locking in a interest rate in expectation of a drop in rates if they own a substantial investment to earn, and price risk to lock in prices of commodities such as oil, plants, and alloys that serve as inputs. Derivatives and Forex help increase the efficiency of the underlying market because they lower sudden costs of buying an asset outright. As an instance, it's a whole lot cheaper and more efficient to go long in S&P 500stocks compared to replicate this index by purchasing every stock exchange.

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