Funding refers to the funding required by a futures trader when they have a position in a commodity, and it has not been offset or liquidated. The funding requirements are calculated based on the margin requirement for that type of futures contract. This article will explore funding requirements for different types of contracts and which brokerages offer this service to their clients.
How can traders specialize in futures?
Traders can specialize in futures by trading on the same contracts for a prolonged period. This is called trend-following or position trading – traders will look to open new trades when they notice trends that would provide them with an edge in their investment decisions and strategies, such as looking at price momentum indicators like RSI.
What happens if there is no funding?
If a trader does not have enough funds in their account to cover losses incurred during the day, then the trade will be closed out, and it would be possible for that trader to incur more trades with over-the-limit margins.
How can you get funding for futures traders? To qualify for funding through the CFTC-approved National Futures Association (NFA), an individual must first pass their Series Four Exam. Once this is obtained, they will need to complete the funding request form available on their website.
Funding for future traders is the funding that futures traders use to hedge against their trades.