How does buying and selling futures stocks work? 10 points?
Futures stocks are expensive, so therefore it is only possible to buy so many of them. If I, for example sold 3 stocks at $1461.65, and later bought the same 3 stocks for $1432.18, just how much money would I have made? Also, is this the same way it works for other stocks?
I mean /ES stock
- DavidLv 78 years agoFavorite Answer
You really need to get a book or three on stocks and futures.
The /ES is not a stock. It is a stock index futures contract, usually referred to as the e-mini. It is highly leveraged and depending on the broker, requires about $5,000 or $6,000 margin in the account to trade one contract.
A stock will not have a slash (/) in front of the ticker symbol. The slash denotes a futures contract in ticker symbol parlance.
Use Investopedia to define financial terms.
Definition of 'E-Mini '
An electronically traded futures contract on the Chicago Mercantile Exchange that represents a portion of the normal futures contracts. E-mini contracts are available on a wide range of indexes such as the Nasdaq 100, S&P 500, S&P MidCap 400 and Russell 2000.
Investopedia explains 'E-Mini '
For example, the E-mini S&P 500 futures contract is one-fifth the size of the standard S&P 500 futures contract. Advantages to trading E-mini contracts include liquidity, greater affordability for individual investors and around-the-clock trading.
The multiplier for the e-mini is $50. That means you make or lose $50 per point. The smallest tick size is 0.25, so your example makes no sense and does not apply to anything in reality.
Most beginners focus on profits first. Most successful traders focus on risk first.
Index futures markets are highly competitive and highly leveraged. Without any knowledge of trading, without knowledge of what you're asking, without any means of making a profit, what is the point of asking how much profit you might make? The answer: at this point, there is not a 1% chance that you could make any profit whatsoever, except through dumb luck.
Sorry about the condescending tone. But we get kids here every day, all day, trying to sound important and trying to sound like they know what they're talking about, making important sounding statements and "therefore" something in their little mind is fact that doesn't apply to anything and it just gets a little irksome. Maybe I need a break.
It is possible, preferable, and more applicable to ask a question without making a statement.
Your statement, "Futures stocks are expensive," and your conclusion and "therefore" that follows makes no sense at all. Making statements that pose as a question is almost dishonest, especially when you have not a clue what you're talking about, and is quite a blunder. Why would you do that in print for all time, for all to see, how you make a joke of yourself and how little you know and care?
Obviously, I could care less about the points. That's not why I'm here. Can't sell them or profit from them or get a date with them. What's the point? - pointless
- SlickLv 48 years ago
Futures Stocks? What are you talking about?
There is stock, which represents ownership in a given corporation.
There are futures contracts - which represents a contract to deliver a certain amount of a given security or commodity at a certain price through a specified date.
For example, if you bought the right to purchase 100 shares of a stock for $10 through the third week in March, then you would have the right to buy 100 shares of that stock for $10 through the expiration of that contract no matter where the price was. If the price went anywhere above $10, say $15 or even $20 or more, you would still have the right to buy the shares at your original $10 price. You won't actually make any money until you exercise your right to buy. Until you exercise your right, the value of the contract will keep going up - or down - depending on the direction of the price.
Of course - you could also sell the contract, and realize a profit in that way.
However, if you just paid the $10 for the 100 shares then the value of the shares you purchased would be going up - or down - as the price goes up or down.
In order to know if an options contract can be made on a given stock, you would need to check with the brokerage firm that you are using. They should be able to tell you. Even online brokerage firms should have a function that can tell you.
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