Derivatives: Pros of Day Futures Trading

Day futures trading is the strategy of buying and selling a futures contract(s) within the same day without holding open long or short positions overnight. Day trades vary in duration; they can last for a couple of minutes or at times, for most of a trading session. It takes lots of knowledge, experience, and discipline to day trade futures successfully.

Advantages of Day Trading Futures

All positions must close by the end of the day, and no positions remain overnight when day trading futures.

A futures day trader should sleep well at night as no risk exists. Most of the time, futures open at a much different price than where they closed the previous day. Price volatility means that the chances of unexpected losses or profits rise when positions remain on the books at the end of a trading session.

One can learn a great deal about the futures markets in a short period by day trading. Day traders typically make more than a few trades every day; compare that to position traders who might make only one trade a week. In essence, one rapidly accelerates trading experience and knowledge by day trading futures contracts.