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Finance & Stock Groups Forum Index » Futures » what is a "side"?
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| Cliff MacGillivray |
 Posted: Fri Oct 10, 2008 7:04 pm |
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I know nothing about futures trading.
When a commission is quoted as "$X per side" does that mean you pay
$X when you buy and $X when you sell? Something else? |
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| Mail Man |
| Posted: Sat Oct 11, 2008 9:43 am |
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"Cliff MacGillivray" wrote:
Quote:
I know nothing about futures trading.
When a commission is quoted as "$X per side" does that mean you pay
$X when you buy and $X when you sell? Something else?
This is correct. $X per side means:
$X to open a position on ONE contract + ANOTHER $X to close this same
position.
A position can be any number of contracts. An ADDITIONAL $X per side is
charged for each additional contract -- i.e., a position with 5 contracts
would be 5 x $X per side.
Some brokers will quote their commisions as "RT," "Round Turn" or "Round
Trip." This fact is often overlooked by prospective and inexperienced
clients when making broker comparisons -- so, be watchful about this
difference. This quote includes the commission charge for BOTH the opening
of, AND the closing of, a single position. Thus, for example, if quoted
$12.00 RT, Round Turn or Round Trip, this is equivalent to $6.00 per
contract per side.
You open a position by EITHER buying OR selling, then close the same
position by doing the opposite -- selling or buying. In the futures market,
going SHORT to open a position is no riskier and no different than going
LONG to open a position -- this risk is required to be covered by a specific
currency-denominated amount of MARGIN value, which you must physically
maintain in your brokerage account throughout the course of the associated
trade.
Mike Collier
Oak Harbor, WA |
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| catalpa |
| Posted: Sat Oct 11, 2008 9:56 am |
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Guest
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"Cliff MacGillivray" <cliff@excite.com> wrote in message
news:adbad$48ef9fdd$c650990a$23457@news.eurofeeds.com...
Quote: I know nothing about futures trading.
When a commission is quoted as "$X per side" does that mean you pay
$X when you buy and $X when you sell? Something else?
A side is one trade in or out of a position. A round trip (RT) is in and
out - 2 sides.
Be careful as futures commissions are quoted either all in (AKA bundled)
(one price = broker fees + exchange fees + NFA fee) or unbundled (specified
broker commission only and you figure out the other fees).
For electronic contracts such as ES, NQ, YM etc do not pay more than $2.40 a
side all in. |
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