Helpful information. Futures: a machine for the risky and the cautious Short futures

Investing in stocks on the Russian market in recent years has only been disappointing. Therefore, many are switching to shorter-term strategies. Today we will talk about futures as an alternative to stock trading.

Futures- a derivatives market instrument, that is, a security with a limited lifespan. Every futures has an expiration date (expirations), after which the futures contract ceases to exist. The parameters of a futures contract are standardized and set by the exchange. A futures transaction binds both participants with obligations: by buying a futures, the buyer undertakes to buy the underlying asset on a certain date in the future at the market price that will be at the time of the contract expiration, the seller undertakes to deliver this product. Despite the fact that the final settlement will be made on the expiration date, the profit or loss on the transaction is determined by the difference between the opening price of the position and the closing price of the position, because every day the profit or loss of the buyer and seller is determined by the so-called "variation margin" and fixed on the accounts in the process clearing. The resulting loss is debited from the account, the profit is credited to the account and can immediately be used to open other positions. For example, if at the beginning of the day the buyer bought 1 futures for Sberbank shares at a price of 7,500 rubles, and by 18.45 this futures rose to 8,000 rubles, then the buyer of the futures will receive 500 rubles to his account during clearing, and the same 500 rubles will be written off from the seller. Regardless of how many days before closing the position, the futures price will rise and how many will fall, the final result, equal to the sum of profits and losses based on the results of the day, will be determined by the initial opening price of the position and the price at which the position will be closed.

Futures for the following assets are traded on the Moscow Exchange: the RTS index, stocks (Sberbank, Gazprom, Norilsk Nickel, etc.), oil, gold, currency pairs (dollar/ruble, euro/dollar, euro/ruble) and many others, but the liquidity of these instruments are different. You should only trade in liquid instruments, so you should limit yourself to the following options: futures on the RTS index, shares of Sberbank and Gazprom, a dollar / ruble pair, gold and oil. It is better to start with futures for the shares of Sberbank and Gazprom and futures for the dollar / ruble.

What you need to know if you want to start trading futures:

When you buy a futures contract, you open "long" position (long), the profit will be if the futures price rises. If the price is expected to fall, then the position is opened by selling the futures, in which case it will be “ short» (short). Technically, the long and short positions are no different.

An open futures position can be closed at any time before the expiration date: on the day the position was opened, the next day, a week later, or a month later. There is no fee to hold a long or short position.

To open a futures position, the buyer and seller must have funds in their account in the amount of at least the amount established by the exchange warranty support(GO), which is several times less than the total cost of the futures. With an increase in market volatility or on the eve of long holidays, the exchange may increase the size of the GO.

Futures are delivered (for shares) and settlement (RTS index, oil, gold, currencies). The buyer of a deliverable futures for shares, if he did not close the position before the expiration date, is obliged to pay the cost of the shares included in the futures, which will then be credited to his account with the depository. The seller of a deliverable stock futures contract must be ready on the expiration date to provide the required number of shares, which will be debited from his account and paid by the buyer. 90% of futures do not live up to the expiration date, positions on them are closed a few days before the set date.

The price for futures can be set in rubles (for shares) or in dollars (RTS index, gold, oil), but settlements are always made in rubles. In this case, the price will depend on the dollar exchange rate. In QUIK, the columns "Minimum price step" and "Cost of the minimum price step" should be added to the table of current parameters, then the cost of the futures in rubles can be calculated using the formula:

Cost in rubles = Cost in dollars* Cost of the minimum price step/Minimum price step

The designation of the futures consists of three parts: the first two letters are the asset code (see the table below), the third letter is the contract expiration month code (most futures are quarterly, except for oil), the last digit is the last digit of the year, for example, 2014 is the number 4 For example, GZM4 futures means a futures on Gazprom shares with expiration in June 2014.

Expiration month code:
H - March
M - June
U - September
Z - December

Advantages futures before stocks: low fees, no fees to hold a short position, trading in the evening session, which reduces the likelihood of opening with a "gap" the next morning.

Flaws: futures are a riskier instrument. If in stocks it is possible to "sit out" the movement against the position, then in the case of futures, such tactics can lead to a drawdown of the account below the size of the margin set by the exchange and to the forced closing of the position.

The analysis of futures differs little from the analysis of stocks. Usually used technical analysis.

Trading schedule:

For more information on the settlement of a futures transaction, we recommend that you watch the recording of the following

2.09.2010

Greetings, comrades!

It's no secret that now in the stock market you can both buy securities and sell them. With the purchase, everything is clear: I bought a futures contract (share) now, and later sold it at a higher price and made a profit. But with the sale, not everything is so clear ... Well, it’s clear that I sold more expensive now, and then I bought it cheaper, but it’s not clear how you can sell what I don’t have. Let's in today's post and we will deal with this riddle.

So, to begin with, let's analyze in general the process of making a profit from a short operation, that is, from the operation “sold more expensive - bought cheaper”. Let's analyze this situation, as a professor at my university used to say, "in a worker-peasant way." Imagine that you have 1 tomato, and now it costs like 2 cucumbers, that is, 1 tomato \u003d 2 cucumbers. You decide to sell your tomato for 2 cucumbers, meaning you get 2 cucumbers for your tomato. The next day you find out that now the tomatoes have fallen in price and have become worth as much as 1 cucumber. You have 2 cucumbers that you received yesterday for your tomato. And you decide to buy back your tomato, but not for 2 cucumbers, but for one, as the price has fallen. You buy back your tomato for 1 cucumber and as a result you have 1 tomato and 1 cucumber left in your hands, from eating you made a profit in the amount of 1 cucumber. This is how the profit from short operations on the stock exchange is obtained. Now let's move on.

A similar situation occurs with securities, despite the fact that you do not have these securities. For example, you expect the price of a particular instrument to fall. You do not have these contracts (shares) now, but your broker has them (he always has everything). By submitting an order to sell an asset, you are, as it were, taking this asset on credit from a broker. That is, you only give an instruction: “Sell 1 futures contract (share) at such and such a price”, and the broker sells his futures contract (share) for you and writes down all the responsibility for the money on your account.

If your forecast comes true, and the price of the asset really falls, then you buy back this asset. To close a short trade, you need to buy as many contracts (shares) as you sold. By doing so, you are repaying your obligation. You took back what you sold and give the broker as much as you took from him. You keep all the difference that you received from this operation. You pay the broker only the commission for the transaction performed (in the case of trading futures contracts). However, in the case of some stocks, the broker still has to pay for lending.

It turns out that the sale of what you do not have is not such a difficult operation. You sell the asset that your broker provides you, and later buy this asset back (you can buy anything) and give it back to the broker so as not to be indebted to him :-), and take the profit from the operation for yourself. You also bear the loss from such operations.

I hope now everything is clear with the sale and you can continue trading without thinking about it.

Happy trading!

Sincerely, Alexander Shevelev.

Exchange activity is the most difficult way to easy money. Such a conclusion is fully expressed in statistical reports that bring disappointing facts: more than 90% of traders do not make money in the financial markets. Against the background of these figures, several questions immediately arise:

• Why is it that such a large percentage of beginners and experienced traders regularly show a negative mathematical expectation of a trading deposit?

• What are the characteristics of successful traders who make incredibly profitable deals in the futures market? What set of rules allows the 10% minority to evolve in trading, developing qualities and skills that contribute to incredible profitability?

Answers to the questions raised are provided by Western analysts who conducted a survey of more than 500 brokers specializing directly in futures trading with services for bringing a client to financial platforms to conclude real transactions.

To understand the underlying causes of futures traders' cash losses, we tracked aspects of the trading of over 100,000 market participants and identified rash patterns and irregularities in trading that lead to the cancellation of a deposit. After reviewing the findings provided, you are 99% likely to reinforce the strong aspects of trading and cross out the negative aspects that lead to losses and disappointments.

After conducting numerous studies and analyzing the current situation, analysts have found that the reasons for the loss of money for traders in the futures market are exactly the same. Surely, from the rules below, you will identify the shortcomings of your own algorithm and raise the level of trading to a new level of development.

They fully express the aspects necessary for a complete understanding of the futures market. For many novice traders, such financial instruments seem confusing and complicated at first, but futures will always be one of the most interesting derivatives for increasing capital.

8 RULES FOR SUCCESSFUL FUTURES TRADING

Here are the general conclusions that professional brokers and analysts have come to when tracking futures trading statistics:

No. 1. CREATE A CLEAR TRADING PLAN

If you do not have a detailed trading plan, you are doomed to failure. This aspect is (primarily) ignored by 90% of futures traders; the complete absence of goals and specific figures that limit risks. The plan must take into account absolutely all points:

• What instruments are traded and why?
• Where will the stop loss order be placed?
• How is a big player tracked and then an entry point determined?
• What is the maximum daily risk (and per single trade)?
• At what set of trading signals will you sell or buy the issuer?

However (even if there is such a list with detailed actions), against the background of overflowing emotions, the algorithm is not followed in 90% of cases. Why? Because the hardest thing is to be disciplined and stick to your own plan of action.

Natural ignorance of the rules leads to a negative mathematical expectation, trading is so captivating that with each negative transaction, the stock trader loses his sobriety of mind more and more and continues to perform rash acts. There are more and more losing positions, and they are expressed in a canceled trading account due to excessive execution of transactions that do not have both technical and fundamental reinforcement.

A fundamental and statistically common mistake is to prematurely close a potentially profitable position while keeping trades showing losses. The reason for such behavior is the realization of their own wrongness in relation to the market trend, while traders do not worry much about the safety of the deposit. Most futures traders who lose money on a regular basis should keep one thing in mind:

“There is ALWAYS TOMORROW, ALLOWING TO CORRECT THE ERRORS OF THE PAST. DON'T MAKE IT WORSE ON BAD TRADING DAYS, WITH REASONABLE RISK MANAGEMENT YOU WILL BECOME 10X YOUR CURRENT LOSS.”

Get out of the realm of illusions into the world of facts, figures and statistics. Not a single trader with subjective thinking has yet achieved success in the exchange activity, only an objective assessment of the market and his emotional state.

No. 2. LEARN TO INTERPRET THE NEWS CORRECTLY

The release of the news factor discourages the crowd of uninformed traders and, against the backdrop of their rash actions, provides large players with a great opportunity to covertly gain a position. At the same time, investors often move the market in a completely different direction than ordinary players expected. Always carefully analyze the chart, the price takes into account all news factors and fundamental values. Sometimes the release of negative news is accompanied by an increase in the futures market, and you blindly look for a SHORT position. And, as a result, the removal of all those who are against the trend.

In addition, statistics prove that futures traders in 90% of cases use news that is not rebounding on the market at the moment or has lost its relevance. This is direct evidence of a misunderstanding of news indicators that are relevant in most cases before publication in the mass media. Remember that you need to enter the position at the time of the formation of consolidation, when limit investors form the beginning of a trend. Why?

Because in 90% of cases, with a clear trend movement that even a child can recognize, big players unload the gained position. To whom? Naturally, you and thousands of other futures traders, however, soon the strength of the trend subsides, and an inversely proportional movement begins. Panic again, and market participants throw off the accumulated volumes of contracts. This is a great opportunity for an investor to rebuild a LONG position.

No. 3. STOP FLIGHT AND CONSERVATIVE

As soon as you conclude a couple of successful trades, self-confidence and pride overwhelm your mind! This happens all the time when such an emotional stage overtakes every stock trader without exception. As a rule, subsequent transactions become ill-considered and without realizing the correctness of actions; futures traders seem to have reached the ultimate limit of perfection.

Now each transaction must show a profit, while the deposit is exposed to undue risk. Why? Because against the background of the captured star, the trader does not use the algorithm, technical and fundamental indicators, taking into account only the joy of past achievements. Surely you can guess how such negligence ends. Many have repeatedly fallen into a similar psychological trap.

Remember that a professional futures trader is always in the here and now; full focus on current positions without relying on past victories and defeats. This is what helps to develop incredible skills in futures trading and accelerate the trading deposit to an impressive size.

No. 4. NO SUFFICIENT CAPITAL? THEN DO NOT MAKE A BIG BID

Beginner level futures traders and experienced traders with a small trading account often make a rash decision and invest their full capital in a position that does not correspond to the risks and money management of the trading algorithm. Against the backdrop of a hopeless situation, futures traders often begin to use the scalping strategy illiterately to correct the situation and bring the account out of the drawdown.

Thus, they believe that by instantly withdrawing profits, most of the transactions will be closed in positive territory. Naturally, this wrong approach ends with negative indicators, leading the deposit to an even deeper drawdown. How to act? Choose trading instruments that match your account, where you don't have to risk everything to make an early profitable trade. Remember: putting your entire deposit at risk for the sake of making several trades with an incomprehensible mathematical expectation is an unacceptable luxury for a futures trader.

No. 5. CALCULATE THE RISK IN ADVANCE AND USEstop order

How do 90% of traders who suffer constant losses statistically reason? There is no need to set a stop loss order in advance, because I am quite sure that this is the position that will bring incredible success. Thus, the futures stock trader becomes a hostage to a losing trade: the position drags the deposit into a drawdown more and more, it is possible that Margin Call will happen.

At times like these, traders curse the moment they entered the trade and make a solemn declaration that as soon as the position hits zero, they will immediately close the trade. At the same time, there is absolutely no reasoning about orders limiting losses, and placing them in a timely manner with a fixed risk percentage of 3 to 1.

Clearly specify in the algorithm the size of the Stop Order, under what circumstances the limiting order will be moved to the side without a loss, and what its size will be. In addition, write down that it is much more expedient to use a short (loss-limiting order) in a mathematical coefficient than one global Stop Order. In this case, you will instantly beat off a series of losing trades with one positive position in a profit-loss ratio of 15 to 1 (at least).

Also, a common mistake is the complete absence of a profitable trading strategy. All futures traders (regardless of the phase of finding the market situation) prefer long positions. However, any book on technical analysis tells that the market is flat most of the time, moving from level to level. Here, positioning works most relevant, and not combinations within the day, designed to take the average movement.

No. 6. ALWAYS ADMIT YOUR WRONG - IT WILL SAVE YOUR DEPOSIT

Brokers who directly monitor the trading of futures traders deduce one pattern: beginners, but sometimes even experienced stock traders, against the background of overestimated emotionality and insufficient capital investment, work purely with one position. Moreover, when the market situation clearly contradicts their arguments and objectively shows an initially negative mathematical expectation. They completely refuse to accept losses, adhering to a subjective opinion about the anticipation of victory. Such traders do not admit their mistake in the chosen trend, engaging in self-deception, which, of course, affects the deposit.

However, there is a type of trader who has an inverse mindset and executes an insane amount of completely unreasonable trades that are losing 90% of the time. In order not to join the ranks of such traders, clearly state in the algorithm a limited number of negative transactions per trading session period and NEVER move orders that limit losses in the hope that the market will provide you with an opportunity to increase the trading deposit.

No. 7. ALWAYS FOLLOW BOTH FUNDAMENTAL AND TECHNICAL MARKET INDICATORS

The stock and currency markets are living mechanisms that reflect all economic and news factors on the chart. Through supply and demand, further movement or equilibrium of a certain financial instrument is formed. Therefore, it is absolutely not relevant to use monotonous trading strategies in the futures market, based strictly on indicators, technical or.

For example, if you enter into transactions, guided only by economic and news indicators against the background of an indicator strategy, this does not mean at all that you need to ignore obvious technical analysis signals that portend a trend or a reversal. There are a large number of issuers who move only due to technology, then how can you successfully trade such financial instruments. If all futures traders on this chart are looking for patterns and other figures of technical analysis.

Regardless of the trading method you choose, always align your futures market entries with different trend detection tools and a profitable position. At the same time, do not try to include all the methods of technical and fundamental analysis in the trading algorithm by creating a 30-page manual. Just always remember that if this strategy does not work at a certain point, it is possible that large players work out quarterly reports on a monthly schedule.

No. 8. APPLY WEALTH MANAGEMENT PRACTICES

According to statistics, out of 100 futures traders, only 3 have a well-formulated method of capital management based on risk and money management. Other traders do not keep statistics; naturally, a complete lack of discipline and a trading algorithm. The financial world does not forgive such recklessness and instantly devastates the deposit of unprepared traders.

You must decompose yourself into numbers in order to develop the strengths of trading and to identify and then minimize the negative qualities of trading futures contracts. Do you want to become a successful stock trader? Then take note of all the rules listed above and immediately implement what you read into the trading algorithm. We wish you all success and profitable transactions on the spot and futures markets!

By placing a buy order, a trader wants to buy a security at a specific price at a specific point in time. When placing a sell order, the situation is similar.

But when it comes to transactions with borrowed shares, a clear understanding of the possible risks and costs is required.

Short trading characterized by a number of features. Below we will look at the costs, risks and nuances of shorting.

Short trading: where to start?

short sale involves the sale of securities borrowed from a broker, subject to their redemption in the future. It is a method of "bearish" strategy or play for a fall.

When you sell 100 shares at $10 each and then buy back at $8, you make a profit of $200. If the price rises to $12 under similar conditions, the loss will also be $200.

The trader makes a profit at the time of the purchase of assets after a price decrease. It is achieved by the difference between the amount received for the sale and the cost of buying at present value. Accordingly, if the price, contrary to forecasts, rises, the market participant suffers a loss.

What is short in trading?

Opening short positions based on a well-thought-out “bearish” strategy will lead to success. But, when making a decision, you need to take into account such nuances as:

• settlement date;
• costs;
• the possibility of forced redemption.

Settlement date- this is the moment of the actual exchange of papers for money. It does not always coincide with the execution date of the electronic order. Many shares are transferred to a new holder within three days. If by the time the transaction is closed, there are less available assets than you sold, the forced buyout. It is also used in some other cases.

In addition, the broker charges a commission for using borrowed shares. Its size is determined by the availability of the asset and is calculated by the formula:

(present value * number of securities * indicative rate) / 360 = brokerage commission

Before you agree to the use of assets with an obligation to repurchase, the broker provides information about their availability, all costs. They are written off with a certain regularity. The history of write-offs from the account is recorded in the corresponding column.

As a rule, hard-to-reach securities are provided at a higher rate and the risks associated with their use are much higher. The probability of forced redemption, withdrawal of shares by the holder increases.

Short trading on the stock exchange, as well as opening long positions has features and risks. Therefore, take into account the nuances and upcoming costs, the prospects for making a profit as carefully as if you were taking a large loan from a bank.

What is a forced buyout? When it is applied

Forced buyout is a requirement to buy securities to cover a short position. The purchase is made through the use of a "buy-to-cover" order. Such a requirement applies when:

1. Selling short implies the impossibility of providing shares, contrary to the rule 203 of the Securities and Exchange Commission, which describes how sellers settle with buyers;
2. The lender withdraws his assets - you need to buy them in order to return him (prior notice is often not made);
3. The broker loses the ability to provide the securities involved in the transaction (a notification arrives with a request to close the position before the end of the next trading session, otherwise it will happen automatically).

Sometimes the requirement to close a position arises due to the irrational use of margin. Then the broker requires you to close all transactions in order to pay the debt. In most cases, it is required to keep a certain non-burnable amount in the account.

To expand your knowledge of selling short securities, watch the video tutorial in which our team trader, Sergey Kolomiets, shows buy formations with a high probability of execution.

• what is trading;
• how to get on the exchange and with what amount you can start;
• what are stock charts;
• examples of situations with a high probability of execution;

From exotic theories of market analysis to deep problems of trading psychology. But sometimes elementary things are left behind the scenes.

For example, now many new traders have come to my personal support, and they constantly ask: “How to open a short (betting on a fall) in order to make money on a decline in securities?”

The essence of a "short" or transaction to sell on the stock market simple - sell someone else's, borrowed shares while they are expensive and buy back as cheaply as possible.

1) "Short" take it!

Balance the need to "short" (bet short) stocks with the goals of your financial plan. Are you sure that you need to use a sell position in your trading strategy at all? "Short"– it is a speculator's weapon.

Speculators in the stock market are those people who do not even have 50% of the savings necessary to achieve the goals of their financial plan. If you have accumulated more than 50% of funds for a house, a summer residence, a car of your dreams, then what kind of speculation? You need to be an investor - investors don't "short"!

2) Am I short?

Before analyzing stocks and trying to bet on their decline, make sure that the broker provides the opportunity to "short" these stocks.

At the initial stage, it is better to print out and hang in front of your eyes the so-called list of "margin papers". Update this list at least quarterly.

Sometimes a broker divides traders into certain groups - with an increased or normal level of risk, there may be different lists for them. Check with the manager which group you belong to.

3) "Short" - a game of secured debt

In debt money for "long" and securities for "short" broker provides only secured. Make sure you have stocks in your account that the broker can lend or lend money against. Again, use the list of margin securities.

4) “Why am I, Burenka, selling you?”

Some traders try to "short" the stocks they currently have in their portfolio. They bought them sometime in order to capitalize on growth. Remember that you need to sell your shares first, and only then will you start going short.

You can sell your shares that are no longer needed and place a bet on their decrease with one application. Just enter a quantity greater than what you have.

To open a short is to sell! Closing a short is buying.

5) Stop a moment, you're awful!

Before making a trade, determine where you will fix the loss in case of failure.

When we go short, we make a commitment. The broker who lent us the money will not tolerate our loss indefinitely and trust us with the shares we have shorted. Therefore, it is better to exit with a small loss in case of danger, rather than wait for the forced closing of the position!

To do this, put " " either before the deal, if the logic of building a trading action allows, or immediately after it. No "stop" - no "short"!

6) Oops, ai did it egane!

Wanted to sell papers and open shorts? Now you do not know how to put a "stop" to an unexpected "long"?

Mistakenly made positions should be closed immediately, as soon as a miss was discovered, even if time has passed and the “long” looks like a good idea.

After that, you need to conduct a rigorous analysis, because of which you missed the button? Tired, do not know how to use the terminal, sick? It is impossible to move on without analyzing such even a mechanical error.