Futures trading is a popular investment strategy that can offer numerous advantages to traders looking to manage risk and generate high returns. Here are some of the key advantages of trading futures:
1. No PDT Rules.... ever
2. Leverage built into the instruments
3. Smaller Universe (not chasing filtering thousands of stocks, names, etc.)
4. Time efficiency - Never building bull/bear/gap watch lists
5. Ticks - Frankly, trading in ticks is simpler in many ways for short term or long term targets
6. Tick Values - are always set : 5$, 10$, 12.50$, etc.
7 . Overnight is only 1 hour / Market open 23/5
8. News Event Management - simplicity - No individual stock news, earnings reports, CEO news, patent, lawsuit, individual instrument risk ... And Pump and Dump with many stocks.
9. No Time Decay - Options also has leverage advantage and small account size but other major disadvantages with time decay being a major
10. Halts - are EXTREMELY rare.
FUTURES 60/40 U.S. TAX ADVANTAGE DETAILS:
While stocks are taxed at the 35% short-term capital gains rate for positions held less than a year, futures are taxed 60/40. This means that while 40% of your gains in futures trading is taxed at the same 35% rate as short-term stock trading, 60% of your gains are taxed at the long-term capital gains rate of 15%!
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