Buying Futures?

[AaronC]

I am a professional poker player who went to college for economics. Over the last year i have followed the markets, done trading games, etc, but have never made the leap into actual investment.

I have looked many times for a way to do speculative future trading, but have yet to be comfortable with my options.

I follow the oil markets, and to an extent precious metals and stocks. I have yet to find a place that provides me the liquidity and information i want to make these trades. I am really only looking to make a small investment until i am more comfortable. (in the range of $500-2000)

any suggestions about material to read on this would be greatly appreciated.

 

[rockandrollsouls]

Don't touch it unless you fully understand what you are getting into. Now would not be the time for inexperienced traders to try and play the market....it's not even the time for experienced traders to play the market.

 

[AaronC]

I wanted to buy oil at 60/barrel. don't see how a long term investment with that could be a terrible risk


(although it may not drop the last few dollars to that level)

 

[rockandrollsouls]

Well, futures contracts have a finite life....like options. I play options to make a quick buck here and there, but I wouldn't recommend it for "investing." Do a little bit of research on futures before you touch 'em.

You could, however, buy some beaten down foreign, and even non foreign, stocks paying a healthy dividend dealing with commodities.

For example, a mining company I happen to like is IAG. The company is insanely solid, undervalued, and paying a dividend (though small at this point in time).

Also, note futures are very, very expensive (And risky to boot...your risk is not limited to the margin). A cheaper alternative would be to trade the option of the ETF that mirrors the commodity.

 

[Johnnybags]

Do an etf or double long or short etf

depending on your conclusions. Futures are not for small investors. You can do virtually anything with the etf's now.

 

[AaronC]

what about merely the options to buy futures?

I am a pretty fast learner and have put some time into understanding the market/discussing with those that understand better than i do. (those discussions were limited to the poker table- so a brief set of questions, but with brokers)

 

[Johnnybags]

No need to venture into futures

or options on futures. Oil, grains, US dollar,gold etc all have etf's or some have leveraged etfs that act the same. Futures accounts are more involved to open, you need more liquidity. What is it you wish to play? What commodity?

 

[AaronC]

futures and options have all the appeal a poker player likes
+EV with investment, high risk, high reward. But again, you may be right, lower risk with some of the stocks i have been following could be the best route...

 

[DFF]

A cheaper alternative would be to trade the option of the ETF that mirrors the commodity

And what would makeup a crude oil ETF considering ETF's (from what I know) are comprised of a variety of different assets? I'm confused since there aren't "different" types of crude oil.

 

[AaronC]

or options on futures. Oil, grains, US dollar,gold etc all have etf's or some have leveraged etfs that act the same. Futures accounts are more involved to open, you need more liquidity. What is it you wish to play? What commodity?

oil (and gambling markets) have been a great fascination of mine long before the last crazy year.

i have learned much about the gambling industry, but the market for the stocks seems to just follow consumer confidence. (+obviously the individual quality of the resort/location)

at different times i read regular news on:
wynn, byd, mgm
rds, xom, pbr
goog, msft, yhoo

 

[rockandrollsouls]

And what would makeup a crude oil ETF considering ETF's (from what I know) are comprised of a variety of different assets? I'm confused since there aren't "different" types of crude oil.

That would depend on the ETF...they are all a little different...you have to read what they track. Here's a short list of a few http://etf.stock-encyclopedia.com/category/oil-price-etfs.html

 

[AaronC]

ok, back to studying
-500 in poker tonight so stocks look even better

 

[danberkeley]

I am a professional poker player who went to college for economics. Over the last year i have followed the markets, done trading games, etc, but have never made the leap into actual investment.

I have looked many times for a way to do speculative future trading, but have yet to be comfortable with my options.

I follow the oil markets, and to an extent precious metals and stocks. I have yet to find a place that provides me the liquidity and information i want to make these trades. I am really only looking to make a small investment until i am more comfortable. (in the range of $500-2000)

any suggestions about material to read on this would be greatly appreciated.

Read Hot Commodities by Jim Rogers

 

[Zippyjuan]

With poker at least you know the odds of coming out ahead. Nothing is certain in markets.

 

[misericordia]

HERE'S A TIP. sHORT THE usd.

 

[Knighted]

Don't just look at something like oil or gold or what not and assume "wow, it's so cheap.. it couldn't go any lower." Because the market as a whole clearly thinks that 'cheap' price is appropriate for some reason likely unknown to you. If, for instance, we had a global depression as some are hinting at, I think oil could very well go below $60. Or there might be enormous uncovered oil reserves that haven't been publically revealed. You never know.

 

[AaronC]

With poker at least you know the odds of coming out ahead. Nothing is certain in markets.

The more advanced plays in poker are all educated guess work. Your estimates arn't on the odds of making your flush draw, but rather what % you believe they would have played their hand in this manner if they hold a range of possible cards, then the %s that he will respond to your range of possible actions with the highest EV for you.


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I also understand that most investors have better information than me, giving me a distinct disadvantage. But i have done pretty well so far with the play money predictions i have made, and would feel more involved / excited with a small investment done in this manner opposed to purchasing bonds etc.

Anyway, it looks like i have some more research to do before i jump in.

I appreciate the suggestions and help!