Futures Investing Charts - Are Futures Really A Wise Investment?

So you want some futures investing charts to help you make the right investment decisions? First of all, you need to know whether or not futures investing is a good option for you. Quite simple, futures are essentially a contract you make to buy a certain stock at a given time and for a given price.

However, here’s the thing: with futures, you are obligated to buy the stock at the given time. As opposed to stock options, where you have merely the option to buy the share, with futures you must buy.

So, for instance, if you agree to buy X shares of a particular stock 1 week from now at $45.00, and they are selling for $50.00 at the time, then you just made a $5 gain per share. However, if they drop to $40 per share, then you are still obligated to complete the transaction, and you will lose $5 a share in this scenario.

Here’s the deal. While many do make good money trading futures stocks, they are very risky due to the short term nature.

Instead of analyzing the financial statements of a company and being able to predict with a reasonable amount of certainty that your investment will go up, you really have no idea with futures investing because it is short term focused. While you certainly can make some money with this formula, in the long run you are more likely to lose, unless you are extremely good at it.

It is much easier to make money simply dealing with shares of a well run company, because you can be sure of their profitability and their future stock price going up. With futures investing, you have no such guarantee, because of the short term nature you are dealing with.

Therefore, it would be best to stay away from futures investing charts, and simply focus on buying shares of a company for the long term, after you’ve analyzed their financial statements and determined they are a good buy. It may not be as exciting as buying and selling futures, but in the end it will be much better for your wallet.

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Tags: buying shares, essentially, financial statements, future stock, given time, heres, investment decisions, make money, money trading, obligated, profitability, stock options, stock price, stocks, term nature, trading futures, well run, wise investment

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