CFD Vs. Futures…+ Trading levels for 10.25.2022

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CFD (Contract For Difference) OR Futures?

By John Thorpe, Senior Broker

Futures Market structure provides a more level playing field for the retail trader than do the Forex and CFD markets. Last week I focused on the differences between Forex and Futures and left a little on the table as it relates to CFD’s, what they are and more importantly what they are not. But again, the focus of last weeks article was not to discuss the differences as much as driving home the point that the futures market gives you, the retail trader, a better shake. It’s a fairer market and offers better opportunities for success, day in and day out.

First, the need to stress to you that futures markets, no matter what hemisphere they are traded in are regulated, CFD’s are not. In Fact, CFD’s are banned in the U.S. and Brazil..

Similarities between CFD’s and Futures:

1.      Leveraged products- you simply need to place a good faith deposit or Margin to speculate on a position.

2.      Multiple markets to trade, from Grains, to Softs, Equity indices to Debt instruments and Metals to Energies.

3.      Both used as hedges.

4.      Derivative’s Both derive their value from underlying instruments.

Differences between CFD’s and Futures

1.      Futures are regulated in the U.S. by both the CFTC and the NFA while CFD’S are not. This lack of oversight of the CFD industry creates transparency issues.  Regulated markets are far more transparent giving the trader of Futures an edge over CFD’s.

2.      Although futures contracts have expiration dates and CFD’s do not, the CFD broker will charge you a carrying charge to hold the position overnight, much like Forex operates.

3.      Futures contracts are more liquid than CFD’s. The Futures contract is a publicly traded entity where all market participants, Hedger’s Institutions, Banks, retail investors are involved in the price discovery process. CFD’s markets are literally bookmakers. You trade against the broker and the broker throws of his/her risk in the regulated futures markets. This results in very wide spreads between the bid and the offer and really penalizes the trader.

4.      Futures offer standardized contract sizes, and often times offering mini sized and micro sized contracts, much like the CFD market does, but again with a transparent market.

if you are looking for transparency and a more level playing field and scratched your head or pounded your fist on the desk because of the problems you may have experienced trading Forex or CFD’s you have nothing to lose, give us a call or send us an email and will work with you to get your account open and trading in a much fairer environment.

As always, plan your trade and trade your plan. Please contact your broker or Cannon Trading with any questions.

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

Futures Trading Levels

10-25-2022

#goldfutures #sp500futures #crudeoilfutures # nasdaqfutures #dowfutures #futurestrading #futuresbrokers
SP500 #ES_FNasdaq100  #NQ_FDow Jones  #YM_FMini Russell #RTY_FBitCoin Index #BRTI SP500 Dec. Gold #GC_F Dec. Silver #SI_F Oct. Crude Oil #CL-F Dec. Bonds  #ZB_F Dec. 10 yr  #ZN_F Dec. Corn #ZC_F Dec.  Wheat #ZW_F Nov. Beans #ZS_F Dec. SoyMeal #ZM_F Oct. Nat Gas #NG_F Dec. Coffee #KC_F Dec. Cocoa #CC_F October Sugar #SB_F Dec. Cotton #CT_F Sept.  Euro Currency

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Economic Reports, Source: 

Forexfactory.com

 

This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.

CPI Lived Up to the Hype…+ Trading Levels for 10.13.2022

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CPI Lived Up to the Expectations….

As we mentioned in this blog before, the market is watching specific reports very closely in order to get clues about further FED actions.

One of these reports is the CPI, consumer price index.

The report came out today at 7:30AM central time and stock index futures moved down very violently. Stops experienced large slippage.

The move in 2 minutes was worth over $6700 per one contract, for good or bad!!

We reviewed and explained this specific topic in a previous blog, explain what happens when the report comes out, the lack of liquidity, CME’s “price banding” rules etc.

Please review the information HERE.

A 1 minute charts of the ES during the report below for your review.

Notice the VOLUME during this one minute ( over 33,000 contracts!)….

The volatility continued for the rest of the session with an impressive reversal to the upside.

As always, plan your trade and trade your plan. Please contact your broker or Cannon Trading with any questions.

#ES
Emini S&P 1 minute Chart; #ES; emini indices

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

Futures Trading Levels

10-14-2022

#goldfutures #sp500futures #crudeoilfutures # nasdaqfutures #dowfutures #futurestrading #futuresbrokers
SP500 #ES_FNasdaq100  #NQ_FDow Jones  #YM_FMini Russell #RTY_FBitCoin Index #BRTI SP500 Dec. Gold #GC_F Dec. Silver #SI_F Oct. Crude Oil #CL-F Dec. Bonds  #ZB_F Dec. 10 yr  #ZN_F Dec. Corn #ZC_F Dec.  Wheat #ZW_F Nov. Beans #ZS_F Dec. SoyMeal #ZM_F Oct. Nat Gas #NG_F Dec. Coffee #KC_F Dec. Cocoa #CC_F October Sugar #SB_F Dec. Cotton #CT_F Sept.  Euro Currency

Improve Your Trading Skills

Get access to proprietary indicators and trading methods, consult with an experienced broker
 1-800-454-9572 Explore trading methods. Register Here

Economic Reports, Source: 

Forexfactory.com

 

This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.

NFP tomorrow, Oct. 7th Futures Trading Levels

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The next big scheduled event is tomorrow: this Friday’s monthly Non-farm payrolls report from the U.S. Labor Department.

If you’re a futures trader and your markets of choice to trade include stock indexes (S&P 500NasdaqDow JonesRussell 2000, etc.), or treasuries (30-yr. T-bonds2-5-10-yr. T-notes), currencies, even metals and energies, you know the importance this report.

Intraday chart of LAST MONTH’s NFP report of the mini SP for your review below:

E-Mini S&P 500 5 minute chart

 

As always, plan your trade and trade your plan. Please contact your broker or Cannon Trading with any questions.

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Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

Futures Trading Levels

10-07-2022

 

#goldfutures #sp500futures #crudeoilfutures # nasdaqfutures #dowfutures #futurestrading #futuresbrokers
SP500 #ES_FNasdaq100  #NQ_FDow Jones  #YM_FMini Russell #RTY_FBitCoin Index #BRTI SP500 Dec. Gold #GC_F Dec. Silver #SI_F Oct. Crude Oil #CL-F Dec. Bonds  #ZB_F Dec. 10 yr  #ZN_F Dec. Corn #ZC_F Dec.  Wheat #ZW_F Nov. Beans #ZS_F Dec. SoyMeal #ZM_F Oct. Nat Gas #NG_F Dec. Coffee #KC_F Dec. Cocoa #CC_F October Sugar #SB_F Dec. Cotton #CT_F Sept.  Euro Currency

Improve Your Trading Skills

Get access to proprietary indicators and trading methods, consult with an experienced broker
 1-800-454-9572 Explore trading methods. Register Here

Economic Reports, Source: 

Forexfactory.com

 

This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.

WYNTK before trading tomorrow, Sept. 15th 2022 Futures Trading Levels

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The Significance of Price Banding & Stop Orders

by Mark O’Brien, Senior Broker

Yesterday, at 7:30 A.M., Central Time, the Bureau of Labor Statistics released its Consumer Price Index (CPI) report, which measures the prices paid by consumers for a basket of consumer goods and services. Overall prices increased 8.3% from a year earlier, down from an 8.5% rise in July and a 40-year high of 9.1% in June. On that news, within a single minute, the Dec. E-mini S&P 500 futures contract fell ±90 points, roughly from 4160.00 to 4070.00.

( see 10 seconds chart below)

This was an exceptionally forceful move and it calls attention to an important control mechanism that the CME Group has implemented not just for the E-mini S&P 500 market, but for all markets and is very important for traders to understand. This mechanism, called Price Banding subjects orders to rules on where they can be placed in the market and rejects orders that are either placed erroneously or come to be outside a given band based on market movement.

There are several important scenarios where Price Banding will affect a trader’s order. This piece looks at STOP orders and in the context of the move in yesterday’s E-mini S&P 500, SELL STOP orders.

The Price Band for the E-mini S&P 500 is currently set at 5.00 points, which because the market trades in .25-point increments, means there are 20 price points, or “handles,” where the market can trade (5 ÷ .25 = 20).

Before the CPI report was released yesterday, the Dec. E-mini S&P 500 was trading at ±4160.00. As is the case with a market that trades in the millions of contracts each day, orders of all types were being placed – and cancelled – at price points up and down the market, including SELL STOP orders below the market. Those SELL STOP orders were subject to the Price Banding parameter of 5 points, which means if a market move resulted in a 5-point or greater price change below any SELL STOP order’s price, the SELL STOP order became a SELL LIMIT order at the price within the band.

By example, before the CPI report when the Dec. E-mini S&P 500 was trading at ±4160.00, if a SELL STOP was placed with a reference price of 4120.00 and the market declined such that it traded through 4120.00 as well as the Price Band price of 4115.00 without filling the order, the 4120.00 SELL STOP order would be converted to a 4115.00 SELL LIMIT ORDER.

A full write-up on price limits and price banding can be found on the CME Group web site: click here.

A complete list of banding information for each electronically traded product is also available: click here (Excel).

Emini S&P Chart
Sierra Charts Teton Order Routing demo

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

Futures Trading Levels

09-15-2022

Improve Your Trading Skills

Get access to proprietary indicators and trading methods, consult with an experienced broker
 1-800-454-9572 Explore trading methods. Register Here

Economic Reports, Source: 

Forexfactory.com

 

This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.