HOW COMMODITY TRADING DIFFERS FROM STOCK TRADINGWritten by Rob Hall
There are major differences between trading stocks and trading futures. While stories of fortunes made or lost overnight on futures markets are largely untrue, futures trader, if using a sound trading system, can usually make more money on futures market and make it much faster. However, if that trading system is not sound trader can have greater losses.This is because futures contracts are highly leveraged. Margins (the deposit required) on futures contracts are much less than for stocks, as low as 3% on some futures contracts compared with up to 50% for stocks. As well, futures investors are not charged interest on difference between margin and full contract value. The margins for futures contracts act more as a performance bond or good faith deposit whereas margin for stocks is more of a loan. Although margin on futures contracts is quite small, it rides full value of underlying contract as that contract rises or falls, thus providing leverage mentioned earlier. Commissions charged by futures brokerages are normally much less than brokerage commissions for other investments. Futures markets use open outcry (auction type) method of trading ensuring very public, fair, and efficient markets. Plus, it is much harder to trade on inside information as so many variables affect markets. Also, futures markets are very liquid. Transactions can be completed quickly, which lowers risk of adverse market moves If you own stocks you are an owner of company. This allows you to share in company’s profits, and losses, through dividends, and increases or decreases in stock’s value. It also gives you certain voting rights with company. However, a company can go bankrupt, leaving you holding worthless stock. When you buy and sell futures you are only entering into a contract and don’t really own anything. What you have is an agreement to buy a commodity or financial instrument (wheat or Treasury Bonds for example) at a specified price at a certain date in future.
| | Guidelines for the Ideal Home BusinessWritten by by Rob Hall
There is bad news and good news in starting a home business.The bad news is 95 % of all new businesses fail within a short time. The good news is home business industry has reached $427 Billion annually, and is growing at an amazing rate. And, 80% of all millionaires today are self made. So, there is a chance your home business will succeed but only after you have given careful thought as to what that business will be. Here are some of attributes of an ideal home business that will improve your chances of success. The Ideal Home Business: 1- Sell to Entire World The ideal business must have an unlimited global market,not just local or regional exposure. 2- Is not cyclical Your product/service does not rely on cycles to be in demand. The demand is constant, regardless of time, or price. 3- Product is Original Your product must be unique. It cannot be easily substituted or copied. 4- Minimal Labor Requirements A large portion of capital is not tied up in high labor costs. 5- Low Overhead Total overhead cost must be minimal. No high priced rent, power, labor, shipping, etc. 6- Does Not Require a Large Cash Outlay The ideal business does not tie up capital in all kinds of equipment.
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