Practitioner course in discretionary trading
How to Trade Futures: Contracts, Margin and Rolls
How to trade futures without learning the hard way: what a contract is, how tick values and margin turn a small move into a large profit or loss, how expiry and rolling work, which contracts suit a small account, and how to size positions so leverage never decides for you.
How to trade futures is a question about leverage first and markets second. A futures contract lets a small deposit control a large position, so a move that would be minor in a stock account can be decisive in a futures account. This course teaches the mechanics carefully, so that leverage is something you choose rather than something that happens to you.
How do futures work?
A future is an exchange-traded agreement to buy or sell a set amount of something at a later date. Profits and losses are settled every day through the clearing house, and you post margin as a deposit against losses. The course covers the contract specifications that turn price moves into money, contract by contract.
Why do futures traders roll their positions?
Because each contract expires. A trader who wants to keep a position closes the expiring month and opens the next one, and the price difference between the two months is part of the cost or gain of holding. The course shows how to roll by hand and how to read the roll on a continuous chart.
Who is this course for?
Traders moving from stocks to futures, and prop traders whose firm trades futures. No programming is needed.
What you will be able to do
- Read a futures contract specification and calculate the money value of any price move.
- Explain initial and maintenance margin, and size positions by risk rather than by margin.
- Roll a position between expiries and explain the cost or gain of the roll.
- Plan and record futures trades in index, rates, energy and currency contracts.
Syllabus, module by module
What a future is
Exchange, clearing house, contract size and the daily settlement of profit and loss.
Ticks and money
Tick size, tick value and the money value of a move, for standard and micro contracts.
Margin and leverage
Initial and maintenance margin, margin calls and why margin is not a measure of risk.
Expiry and rolls
Contract months, the roll, and the difference between futures and spot prices.
The main contracts
Equity index, interest rate, energy, metals and currency futures and their trading hours.
Sizing on margin
Risk per trade in ticks and money, and the account size each contract really needs.
How the certificate is earned
Weekly contract exercises and two graded problem sets: a specification workbook for six contracts, and a twelve-week simulated futures record with a review. On a pass you receive the Course certificate in Futures Trading, issued by the Institute with a verification code. Read how certification works.
Before you start
Intraday Trading: Manual Execution and Spread Costs.
This course counts toward
- Advanced Certificate in TradingThe third semester of the trader path, for a certified trader at advanced level: order flow, futures, momentum and breakouts, global macro, fundamental analysis, how desk traders think, prop trading firms and overtrading, with a desk-style simulated book as the capstone. No programming.
- Diploma in Professional TradingThe top credential on the trader path and the Institute's trading certification for people who do not write code. Three semesters, 24 courses and a 160-hour capstone, from a first lesson on how markets work to a six-month simulated trading business reviewed like a desk.
Questions applicants ask
How much money do I need to trade futures?
Less than before micro contracts existed, but more than the margin figure suggests. The course has you calculate, for each contract, the account size at which a normal stop stays within one or two per cent of the account.
Can I lose more than my account in futures?
Yes. Futures losses are not limited to the margin you posted, and a large gap can take an account below zero. This is why the course sizes every position from the stop and the gap risk, never from the margin.