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Basics of Futures Trading
Trading commodity futures and options is not for everyone. It is a volatile, complex,
and risky business. Before you invest any money in futures or options contracts, you
should:
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Consider your financial experience, goals, and financial resources and know how much
you can afford to lose above and beyond your initial payment.
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Understand commodity futures and option contracts and your obligations in entering
into those contracts.
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Understand your exposure to risk and other aspects of trading by thoroughly reviewing
the risk disclosure documents your broker is required to give you.
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Know who to contact if you have a problem or question.
The CFTC brochures will provide
you with general information about trading commodity futures and options. We encourage
you to ask more questions and gather more information before you open an account.
The CFTC also issues consumer advisories
to alert the public to warning signs of possible fraudulent activity and offer
precautions individuals should take before committing funds. We encourage you to
review these advisories before you trade.
Additionally, you may wish to visit the
National Futures
Association (NFA) Investor Services web site for more information and related
publications.
Broker Registration and Background Information
Before you open an account, you should always check on the company's or
individual's status:
Background Affiliation Status
Information Center (BASIC)
Through this online system, National Futures
Association (NFA) makes available registration information and futures-related
actions contributed by NFA, the CFTC and the U.S. futures exchanges. If you need
registration information that's not available in BASIC, you can contact NFA's
Information Center at (800) 621-3570.
Administrative Sanctions in Effect List
This list contains the names of firms and individuals that currently have
registrations and trading sanctions in effect as a result of administrative and
statutory disqualification proceedings.
Reparations Sanctions in Effect Lists
These lists contain the names of individuals or firms who have not paid awards which
were levied against them as a result of reparations proceedings.
Proceedings Bulletin
This bulletin contains information about the Commission's administrative and
injunctive enforcement actions and its statutory disqualification-from-registration
proceedings.
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