Trading futures can be advantageous in a number of ways:
- Futures allow benefiting from price increases as well as declines - you can go short and long.
- Futures provide financial leverage
- Futures can be used to hedge price risk
- Trading the market with increased transparency.
- Futures are associated with low transaction fees
- Mature and highly regulated industry
However, trading futures, derivatives and other instruments using leverage involves an element of risk. The value of futures you enter into may fall as well as rise and you may get back less than your initial collateral, and in some cases you may lose your entire collateral balance.