Which one is more beneficial to trade, Forex or commodity/stock futures? Some of you might say that there is no essential difference between these markets. Indeed, you can apply similar trading approaches to trading Forex currencies and futures. However, there are some differences. What are they?
Let’s find it out together…
Forex Currencies and Commodity Futures
According to Yuri Borovoy, a representative of ActiveTrades’s Russian office, the market of futures is more “real” than the Forex market. This is probably the major difference between them. Forex is more like a virtual market where you speculate currencies (they are just means of payment and essentially have no real value). On the contrary, stocks and commodities have real value (so have futures on them as they represent a contract allowing you to buy/sell a real underlying asset).
Forex is subject to higher speculation. Therefore, it is more difficult to predict the direction of the forthcoming price moves. Futures contracts are less dependent on short-term trends. If to consider commodity futures contracts (say, coffee or sugar futures), you and the counteragent agree to buy/sell a certain commodity in the future (say, in a month) at a predetermined price. Obviously, you benefit if you sell a commodity at a higher (or buy at a lower) price than the one that will be on the expiration day.
Obviously, any futures exchange requires both the parties (the buyer and the seller) to put up an initial amount of cash, which is called the margin. Forex traders must meet certain margin requirements (i.e. have enough funds on their trading accounts) in order to open a trade.
When trading futures, you can hedge against a move contradicting your trade. Along with hedgers, there are speculators who try to benefit from short-term price moves. Together they ensure high liquidity that is required to profit from trading the market.
ActivTrades: Forex and Futures
One of the main differences between Forex and futures is that futures contracts are standardized by futures exchanges and can be traded only there.
ActiveTrades provides access to the world’s major stock and commodity exchanges, including:
· Chicago Mercantile Exchange (CME)
· New York Stock Exchange (NYSE)
· London International Financial Futures and Options Exchange (LIFFE)
· Borsa Italiana (Italian exchange)
· Other stock and commodity markets
Therefore, the clients of ActiveTrades get an opportunity to trade a great variety of futures contracts on coffee, grains, crude oil, natural gas, stock indices and other assets available in 15 countries (30 exchanges) around the world from a single trading account. Any of the assets can be traded online. Customer support is available 24/5.
Moreover, ActiveTrades offers traders and investors a number of the world’s most popular trading terminals including J-TRADER, NinjaTrader, Pro-Mark and even MetaTrader 4 and 5. The spreads, fees and commissions are probably the lowest in the industry.
ActiveTrades is a company that can boast Swiss quality and British reliability at the same time. It is a client-oriented company aimed at providing high-quality services at almost no costs.
Expert Opinion
According to Eugene Olkhovsky, ’s leading expert in financial markets from Canada, ActiveTrades definitely sands out in the crowd. The British company has been in the industry for over 10 years. It offers competitive trading conditions. The variety of trading instruments does impress. Moreover, the broking company is regulated by a major financial watchdog - Financial Services Authority (FSA). Therefore, when trading with ActiveTrades, you can be sure that your broker is reliable.
Taking into consideration all the information mentioned above, we can conclude: It is not accidental that ActiveTrades has been in the premier league of ’s rating of brokers since the very beginning. ActiveTrades is among the industry’s best brokers. So, if you are looking for a reliable, licensed broker, with high-quality services and a great variety of assets to trade, ActiveTrades is one of the options to consider.
Still, trading can be risky. So, make sure that you are skilled and experienced enough and have a profitable trading approach before you start real-money trading. Otherwise, try demo trading first.
