Posted by forex at 5:55 AM
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1. Determine how much money you are willing and able to invest in trading derivatives. Most brokers require you to deposit a minimum amount of funds to start trading--$1,000 or $2,000 is usually enough. You should know, however, that trading derivatives involves a significant degree of risk as price swings in those instruments can be severe.
2. Find a brokerage firm that will allow you to trade a wide range of derivatives. You can easily find many brokers on the Internet, as all of them allow trading online these days. Compare commission fees of different brokers, as well as their reputations. Check the broker's official status with its regulator (Commodity Futures Trading Commission (CFTC) in the U.S.).
3. Open an account with your broker and deposit the funds you set aside for derivatives trading. You can transfer the funds via a bank wire transfer. It will take about 2 to 5 days for your broker to receive the money and deposit it in your trading account.
4. Watch the derivatives market closely. Get as much information about derivatives trading as you can. A good idea would be to read books on derivatives trading, preferably written by authors with recent first-hand experience in trading derivatives. You can find such books online or at your local bookstore. You can also borrow them from your public library.
5. Start trading derivatives. Be cautious and remember that derivatives' prices often move randomly and unexpectedly. Don't put all of your deposit in one instrument, but spread the risk by buying and selling different derivatives.