Futures Training / Trading Example
Futures are traded on various exchanges around the world but mostly in Chicago and New York. The Futures products that Orion has made available for trading are:
| Energy Futures | Light Sweet Crude Oil | CL |
| Mini Natural Gas | NG |
| Commodity Futures | Coffee | KC |
| Index Futures | Dow Jones | DJ |
| Mini Dow Jones | YM |
| NASDAQ | NQ |
| Mini S&P | ES |
| Currency Futures | EURO | EC |
| British Pounds | BP |
| Japanese Yen | JY |
| Swiss Francs | SF |
All futures have expiry months that are abbreviated as follows:
| F=JAN | G=FEB | H=MAR |
| J=APR | K=MAY | M=JUN |
| N=JUL | Q=AUG | U=SEP |
| V=OCT | X=NOV | Z=DEC |
The most popular and most liquid of all the energy futures is Light Sweet Crude Oil.
| Energy Future |
Contract size |
Value of 1 pip |
| Crude Oil |
1,000 barrels |
$ 10.00 |
For each lot you want to open (trade), you must have a minimum of $1,000 in your account (1% margin).
Therefore if you start your account with $10,000, you can buy or sell up to 10 lots (though not recommended). If you profit $2000 because you made the right decision, then on the next trade you can open 12 lots. If however you lose $2,000, then on the next trade you can only open 8 lots.
Margin a call:
There is no margin call on the account. However, all positions in the account will be closed when the margin level is at 5% (Equity / Margin ratio).
Example:
Equity $10,000 ÷ Margin required $5,000 = 200%
Equity $5,000 ÷ Margin required $5,000 = 100%
Equity $1,000 ÷ Margin required $5,000 = 20%
Equity $250 ÷ Margin required $5,000 = 5% (all positions will be closed)
Profit and loss calculation:
Buy 3 CLH5 at 65.00 / Sell 3 CLH5 at 66.50
(3 x 1,000 x 66.50) – (3 x 1,000 x 65.00) = $4,500 profit
Buy 5 CLJ5 at 66.80 / Sell 5 CLJ5 at 66.00
(5 x 1,000 x 66.00) – (5 x 1,000 x 66.80) = $4,000 loss
NOTE: The above calculations do not include commissions.
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