Trading futues contracts

[samhill]

I’ve never traded on the board, thinking of it.

How many contracts in one trade should a rookie do?

Thanks for any replies.

[farming101]

I’ve never traded on the board, thinking of it.

How many contracts in one trade should a rookie do?

Thanks for any replies.

Which commodity are you looking at?

[samhill]

Primarily corn but also wheat, maybe beans.

[GDR]

I’ve never traded on the board, thinking of it.

How many contracts in one trade should a rookie do?

Thanks for any replies.

Go big or go home, this way you dont have to worry about bin space!

[bucket]

I have a question....if there is money to be made trading ...why farm?

Paper trade listening to Errol or others and sit on a beach.

Not being sarcastic...I just want to know how much is there to be made and the corresponding costs to trade?

[blackpowder]

If your green would advise looking at options for hedging..
If speculating, as a greenhorn get a responsible broker as you can lose your house in one day with futures. Leverage works both ways.
My broker actually has a hedging only program.

[redleaf]

I’ve never traded on the board, thinking of it.

How many contracts in one trade should a rookie do?

Thanks for any replies.

“Just put your money in an envelope and send it to Chicago.”

That’s not my quote but I read it online years ago and thought it was hilarious. If you are going to speculate on commodity furptures tread carefully. Never risk more than you can afford to lose. Leveraged margin accounts can clean you out with very small market moves.

[farmaholic]

Finally grew a pair and looked at my self-directed TFSA account, pretty much all in shares of an established pipeline company. After the carnage, if it's even over yet, the dividend is now 7.91%...LOL. Hope they don't reduce the quarterly dividend! Pre-collapse dividend was about 6%. Patience Grasshopper.

Not even a fair comparison to trading futures, but at least I still own the stock and have the ability to gain the capital back if I don't sell them.

Trading futures with expiry dates, option premiums, margin calls, rolling fees.... I fear what I don't understand, and I know jack-shit about trading futures.

I think I will stick to growing the physical, gamble with and trade the physical.

That's my position.

[farming101]

Primarily corn but also wheat, maybe beans.

So, no canola,

First realize everything is in USD. So you are really as much interested in the CAD/USD changes as you are in the underlying commodity. Second, while there is a mini contract (1000 bu) in these commodities the much more liquid contract is 5000 bu so even initial margins are a consideration.

https://www.barchart.com/futures/contract-specifications/grains https://www.barchart.com/futures/contract-specifications/grains

Farmers need to be hedgers first and rarely if ever speculators.

Options are a good place for hedgers to start. Costs are known. Volatility can make options expensive. An option does not have to be held to expiration or be exercised. It can be sold/bought when in the black before the last trading day. Costs are known.

How many contracts to start? Realize if you are hedging you are bound to have your position go against you sooner or later. the idea is the grain you still have in your possession is going up too. It's not perfect though, especially when there is a long way and an international border in between you and the delivery points and an exchange rate to boot. Be ready with lots of cash for margins if you are hedging and going to stick it out.
Example: 10 contracts (50000 bu of Kansas wheat) July closed today at 4.825. You take a short position today(not saying whether that's wise or not) tomorrow it's up 20 cents(10,000). You only had 7250 USD left in your acct. You will get an urgent phone call to wire in $10725 USD to cover the amount the position went against you and restore an initial margin level.

If you're just wanting to learn and get your toe wet the answer is 1(one) contract. It will limit your losses. View it as tuition.

[tubs]

I have done some of that the big thing is patience and don't get addicted to it. Just like Vegas pick one crop and pay attention. I HAVE NOT GOT RICH DOING IT.
'
,

[samhill]

Thanks for all replies, are broker fees based on per contract or per trade?

[blackpowder]

Sell covered calls on your stocks farma

[farmaholic]

Farma does that company utilize the enhanced dividend tax credit ??

I have no idea. It's in a TFSA so there is no tax on growth regardless of what kind it is.

Is what you're talking about a CRA calcution for tax purposes on taxable dividend income?

Anyone?

[farmaholic]

Farma does that company utilize the enhanced dividend tax credit ??

tfsa for dividends ??

The dividends are eligible for DRIP, "dividend reinvestment plan".

[farmaholic]

Sell covered calls on your stocks farma

Teach me BP.

what strike price should I pick and how much is the call worth?