Ever wondered, how do you make money in the stock market? In this article I am going to tell you exactly how to do this.
How do you make money in the stock market? There are many ways to make money in the market; one of them is to trade futures.
A future is nothing more than a contract between a buyer and a seller to exchange an underlying asset at a certain price at a certain date.
Here is an example; lets say you want to subscribe to cable TV next year.
You enter into a contract with the seller to pay x amount a month for the year.
This is almost the same as a futures contract - you have agreed to buy or sell an asset at a certain price and time.
Futures are mainly used to speculate and hedge.
Hedgers will buy and sell futures contracts to protect them from future price changes.
Speculators will buy and sell futures contracts to benefit from price changes.
This is how you make money trading stocks.
There will always be two parties in a futures contract.
The seller has what is called a short position, and the buyer has a long position.
Going long means that you are trying to profit from future price increases and going short means that you are trying to profit from future price decreases.
Another way method for making money from futures is spreading.
This is when you use the price difference between two contracts of the same type of commodity to generate a profit.
There are two types of spreading.
· Intermarket spread - here you buy two contracts for the same month, you then go long on one market and short in another.
· Calendar spread - here you buy two different contracts that are the same price and type but have different delivery dates I hope you enjoyed this article on how do you make money in the stock market.
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