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Understanding (and managing) the Risks of Futures Trading
Posted By: National Futures Association (NFA)
Anyone buying or selling futures contracts should clearly understand that any given transaction may result in a loss. The loss may exceed not only the amount of the initial margin but also the entire amount deposited in the account or more. Moreover, while there are a number of steps that can be taken in an effort to limit the size of possible losses, there can be no guarantees these steps will prove effective. Well-informed futures traders should be familiar with available risk management possibilities.
Reprinted with permission from the National Futures Association. Copyright 2002.
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