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Futures	Essentials of Futures PDF

Overview

Potential Benefits and Risks

Investing in Futures

There are several ways to participate in the futures market. Selecting the methods that are right for you will depend on your experience in futures markets, your time horizon, investment objectives and risk tolerance. Be sure to speak with your financial advisor before deciding on a course of action.

There are three primary vehicles in the futures market: commodities, currencies and financial futures. It is important to understand each before you and your financial advisor decide which—or what combination of these, if any—is appropriate for your needs.

Outlook on Futures
While they are risky on their own, a diversified portfolio of managed futures can provide the opportunity to help manage risk. They provide trading efficiency and may provide investors with an opportunity to profit from anticipated price movements. Once available primarily to the institutional marketplace, today futures are more easily accessible to individual investors. Investing in futures offers both benefits and risks, so be sure to consult your financial advisor, who will help you determine which, if any, may be appropriate for your investment needs.

This educational piece is not intended to be comprehensive. Before investing in managed futures, be sure to discuss them with your financial advisor to make sure they are appropriate for your time horizon, risk tolerance and objectives. Investors should be aware that there are risks, special costs and requirements associated with financial futures and that they may not be appropriate for all investors. When owning futures, investors should consider the impact and risk of maintaining a margin account. Margin is defined as borrowing money from a broker/dealer to purchase securities. It is sometimes called “buying on margin.” Should an adverse price movement affect your securities, a margin call will be issued, which demands additional investment to cover the loss. Failure to meet a margin call can result in losing more than your original investment. Futures should be regarded as short-term trading vehicles and should be regarded as inappropriate for anyone who is unable or unwilling on short notice to access other financial assets in order to meet margin calls on open futures positions.

The information provided here is intended to be general in nature and should not be construed as investment advice or a recommendation of any specific security or strategy.

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