Key takeaways
- Futures are financial contracts that represent an agreement by investors to buy or sell a specific asset at a price and date in the future.
- The futures market is volatile and open to unexpected changes. Hence, it requires strict monitoring to avoid losses.
- It is generally advisable that experienced professionals trade and invest in futures because they understand the market.
Jump to a section
- What are futures?
- How to invest in futures
- Advantages of futures trading
- Disadvantages of future trading
- Future trading FAQs
What are futures?
Futures are financial contracts that represent an agreement to buy or sell a specific asset at a predetermined price and date in the future. The asset can be anything from commodities such as gold or oil to financial instruments such as currencies, stock indices, or individual stocks.
Futures trading allows investors and traders to hedge against price fluctuations, speculate on price movements, and manage risk. It can be used to lock in a price for an asset in the future, which can be beneficial for businesses that rely on a particular commodity or raw material.
Futures trading explained in simple terms
Imagine you own a restaurant business, and you sell food to people at an average of N1,000 per plate. But you notice that sometimes the price of rice, which you need to make your food, goes up and down depending on the season.
So, to make sure you can keep selling food at N1,000 per plate, you decide to make a deal with a rice farmer. You tell the farmer that you will buy a certain amount of rice from them at a fixed price, say N20,000 for a bag of rice. This deal is called a “futures contract”.
Now, even if the price of rice goes up in the future, you know that you can still buy them at the price you agreed upon with the farmer. And if the price of rice goes down, you might end up paying more, but at least you know you won’t be losing money by selling your food for less than what it now costs to make it.
Futures trading is kind of like that rice deal, but instead of rice, people buy and sell contracts for things like stocks, commodities and currencies.
How to invest in futures
1. Research the market
Investing in futures is not like other kinds of investments. It is important to study the market to know how it works and the risks associated with it.
2. Open a futures trading account
After understanding the market, open an account. You cannot invest in futures without a futures trading account. With the services of a brokerage firm, you can set up a trading account.
3. Select a futures market to invest in
There are different types of futures contracts in the market. It is advisable to pick the industries you are interested in or already familiar with. It could be energy, agriculture, stocks, oil, gold, etc. Being in the market also requires you to keep learning about the latest developments.
4. Choose an investment strategy
Investment strategies are not foolproof and carry varying levels of risk. It’s always advisable to do your research and consult with a financial advisor before making any investment decisions.
5. Place your futures trade and manage it
The market is volatile and prices fluctuate from time to time. Keep an eye on the market and ensure that your investments are safe. Know how to manage your investments when the prices are against you.
Advantages of futures trading
- Risk management: Futures contracts allow traders and investors to hedge against the risk of price volatility. For example, a farmer can sell futures contracts to lock in a price for their crops before they are harvested, reducing the risk of a price decline in the future.
- Leverage: Futures trading offers the potential for high returns with a relatively small amount of capital. This is because futures contracts are highly leveraged, meaning that traders can control a large amount of an asset with a relatively small investment.
- Liquidity: Futures markets are highly liquid. There are always buyers and sellers available to trade with. This makes it easy for traders to enter and leave positions quickly.
- Price transparency: Futures markets are highly transparent, with real-time price quotes and volume data available to all participants. This makes it easy for traders to monitor market trends and make informed trading decisions.
- Diversification: Futures trading offers the ability to diversify portfolios beyond traditional stocks and bonds. This can help investors reduce their overall portfolio risk and potentially increase their returns.
Disadvantages of future trading
- High risk: Prices can be highly volatile and subject to sudden and unexpected changes. This can result in significant losses for traders who are not properly prepared or who do not manage their risk effectively.
- Margin requirements: Futures contracts are highly leveraged— and this also means that traders need to meet strict margin requirements, which can result in additional costs and risks.
- Contract size: Futures contracts are standardized, meaning that they have a set contract size and expiration date. This can make it difficult for traders to customize their positions to match specific needs or investment goals.
- Counterparty risk: Futures contracts are traded on exchanges, which act as intermediaries between buyers and sellers. While exchanges are highly regulated and secure, there is always a risk that a counterparty will default on its obligations, resulting in financial losses for the other party.
- Market volatility: Futures markets can be highly volatile, with prices fluctuating rapidly in response to economic, political, or other external factors. This can make it difficult for traders to predict market movements.
Can beginners trade in futures?
Futures trading requires some level of expertise and it is not advisable for a beginner trader with no technical knowledge to start trading. It is okay to do research and learn about the market from professionals. After you’ve got a good grasp of the market, you can begin your investment journey.
How do you make money from futures?
You can make money from futures by buying and selling assets as it benefits and increases your portfolio value.
Who should invest in futures?
Investing in futures is generally more suitable for experienced investors who have an adequate understanding of the market and the risks involved.
Bottom Line
Futures trading can be complex and bring significant risks, including the potential to lose an entire investment. This is why it is crucial to understand the risks and do your research before investing. Don’t forget to seek the advice of a financial advisor before making any investment decisions.
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Am happy to read this ope, my Question is this..how much can I withdra from your App to my bank account.
Thanks
Where is your office in Nigeria?
Do you have an office in Port Harcourt?
Do you have a desk with any bank in Nigeria
This is so true and real, Ponzi has led a generation of greedy people who are under the exposure of the cruel government to continue in the greed run, it looks so real, and has so much seduction and compulsion.
My question is how do I invite people to invest pls
Yeah, knowledge leads, getting quick rich is scam…….if I want to start to invest now, do I need to invest on three sides…..do the funds invest on the same things?
Good day,
Where is the question you promised at the end?
Hi Tosinmile, it’s the last sub-title:
Nothing is free – Will knowledge or greed lead?
Do you want to be a successful investor?
Fascinating read as usual. I’m truly grateful that I had an earlier exposure to Ponzi schemes and suffered minimal loss before learning from it. Ponzi schemes will always exist because ppl are inherently greedy and desperate to make money. I just hope I can educate my children to be money wise
How do we trust you too, because we don’t know your house, family, and you don’t have an office too. All we do with you is still on app (cowrywise). So what do we do sir, ma?
Hi Nuhu.?
We’re regulated by the SEC – https://cowrywise.com/blog/cowrywise-sec-license/
Our office is located at 5C, Rev. Ogunbiyi Street, Ikeja GRA.
It is false to state that we do not have an office.
Ope i have read this and I totally agree. Don’t worry I wont put money in Ponzi, when I can keep it with you. Ope please no more emails for this week. Thank you my love.
Lmao
Thank you for this
An intelligent and informative piece, however, where is the question?
When can I be able to withdraw from this site please
So my question is what’s the minimum amount u can invest ?
#200
I appreciate your effort, reaching out to people like me, Thank you. It really a privilege I most say. More updates please.
Ope, why are you guys not into stocks? Your only mode of investment is mutual funds and treasury bills.
What is the minimum amount to start with,can I withdraw Money at any time and what is the parentage of the profit.
Hello Maryam, trust you are doing well. The minimum amount you can invest is N100 to N1,000,000 depending on you. You can withdraw your money depending on the type of savings or investment plan you choose. When you are about to save all this option of how long your savings will be comes up and you decidecwhis is best for you. I hope this was helpful. Annual returns is 8.8%
Thanks ?
The write up was very helpful for me and the following questions, and response that followed. Thank you Ope for constantly updating us.
How can I withdraw from my emergency plan without maturity stage?
I can’t just stop following any article from you Ope, because you and Cowrywise has opened my eyes positively, great one, kudos.
I’m still not getting this,I as a person I’m not investing all I want to do is to save and anytime I tried doing that it doesn’t work out it kept saying your bag is secured while I won’t still be debited didn’t you think there is
anything going on with my account
This is educational and inspiring. You’ll be surprised some people will read this piece and still fall for sh*t when it occurs. Nigerians no deh hear the word. All of the people I warned during the time of Ponzi still invested when Loom surfaced. In the end, they were all doomed. A word is indeed enough for the wise.
That is an interesting and educating story from you there…. All those things at the starting point they look real but at the end you will see it’s fake coming to your side are we in the surfer hand or is it going to do otherwise
Thank u every much
Glad to read dis
Hi new something important
Yeah, knowledge leads, getting quick rich is scam…….if I want to start to invest now, do I need to invest on three sides…..do the funds invest on the same things?
Hhmm ope this is really great I love it I most commend you you are doing a great job I have fall a victim of some apps even the WhatsApp group also thank God cowrywise have open my eyes now because I’m investing with them and my profit is coming in everyday thanks Ope more update please
Wow I really love your write up, I give u five star ?????
Interesting and eyes open especially to greedy people who are too addicted to get rich quickly.
Pls Ope, I have a very serious matter and I’m very sad about it, with my account that your company is toying with by flagging me repeatedly.
What’s the problem I don’t know, I message, you did not reply.
Upon many people, I’m introducing to your platform and a lot of canvasses I do because many are saying to me that Cowrywise is a scam and I’m trying to condemn it
But, what I’m seeing from your company to me is scaring me seriously. The most painful aspect is that just immediately I link my card to start saving the next sad experience after my activation till now is that I’m on able to log into my account again after my card details have been collected and my account is debited..ah! Now you log me out of the app and I can’t log in any longer till now so so sad and this is very alarming.
Even one of my close related that I refer, she also submit all her card details and start saving, the same thing, she was logged out and she was even saying sebi I said Cowrywise is legit. In fact, I’m short of words, I just try to excuse myself because I’m disappointed with that development after she connects her card, that’s too bad.
In fact, I force her to do it, she didn’t want to use her card but I told her no problem.
But now, you create a problem
Pls help me rectify this oo
It’s very sad and I can’t log in to my account again…o sad gan
How can someone start investing with?
Into what can we invest?
ayindeyahaya2233@gmail.com
Wow am really appreciate with this enlighten.
Thanks Ope and Cowrywise.
I learnt my lessons about Ponzi schemes as far back as 2016 after MMM served me my first breakfast with my school fees. But what about these platforms that talk about reading news and get paid, something like that. They are hilarious though, but what do you think of them.
Thank you Ope, you really touched exactly were ‘am going, scams here and there, ever I haven’t been a victim, ’cause ‘am contempted with any little I have, a friend mentioned cowrywise when he was troubled by Lastma, and came to me for assistance, we started by talking of investment, then he said of your scheme a,and show me some proof, meaning it was not pay50k nd gets 100k of a type on social media, we discuss to the extent of showing me his transaction, then I was convinced, he sent the application to me on my WhatsApp, I then further, is a such of Relief, ’cause the amount I put in is an average of what I spent on enjoying myself daily.
How it is work,
This is d reason why I don’t want to invest my money to this platform, because am also a victim to mmm.
Good afternoon Ope, how do you guys generate the percentage you add to our money, like what do you guys actually do for you to just dash us 7.5% for just keeping our cash ?
Please I’ll appreciate an answer.
Good afternoon Ope,
I’ll say knowledge leads, as getting rich quickly without stress or risk is obviously a scam.
Please, how can I create a one-month fixed investment? The least I can find is three months.
Wow, this is really educative, thanks for the tip.
Hello Ope, thanks for always looking out.
This ponzi scheme mindset sticks very easily(putting money in something and expecting returns at the speed of light). If I want to change it I’d need to understand investment from basics.
Seeing as you have some knowledge concerning investment, What Do You Suggest I Do?
Thanks for the info.
Thanks for this ope. I enjoyed it. And it was very informative too. Learnt a few things. Thanks again.
Thanks dear Ope.
Making money is not an easy thing, let’s be careful scammers are everywhere.
Thanks miss or Mrs ope….you are right with it all..
Although making money is not been easy is all about risk taken, and as well one need to be aware of scammers
Accurately insightful…
I love reading this Ope. My friends has being victims to ponzi scheme,
i would have, if I didn’t have so much fear on investment and it risk.
Am happy I did investing with your company.
I didn’t invest much but, as I get to understand how investment works, better. I will be an investor down to my last.
What a write up from OPE,
This is good and my doubt has been cleared because is like you read my mind regarding investing
This is nothing but the total truth.⚡?
It’s high time Nigerians awake out of sleep regarding investment and Ponzi schemes.
Cowrywise ride on with the good works ???
Nice piece Ope!
I usually find your write-ups very explanatory.
Thank you.
Good read, but where is the question you promised I will answer. This is new year Ope!!
I sincerely appreciate this post. My eyes have been opened ? like literally.
Thank you Cowrywise.
Oh that’s good, very good coz this is the same thing trying to happen to me right away.. there’s this guy trying to introduce me into cryptocurrency online business buying and selling stuff..the question is should I continue receiving from him?
This is so accurate ?
What is the minimum amount you can invest
Hi Eniola.
There’s no minimum amount you can begin investing with.
Start from the amount you’re comfortable with and grow from there.
Need more info about the investments currently available on Cowrywise? Please, check here – https://cowrywise.com/mutual-funds
Hi Ope good day, please I would like to know. How do you come up with great contents like this? Please teach me the secrets.
please what does fraudulent referral mean??
I want to know and be enlightened
Because most of my friends and myself was not paid our referral bonus because we were accused of making fraudulent referrals which we don’t understand and hence we were permanently banned from using Cowrywise after we have saved and spend much effort and time to refer people.
How can one get his referer bonus, have refered people but wasn’t paid jan31 as said by cowry wise
Thank you cowrywise acording to the question…… Knowledge shall lead why greedy shall serve under the sand knowledge stand on
Have they given u profit from ur investment