We often hear about futures contracts in the finance headlines but what is their length? is it a month or 3 months?|||Your question is confusing. Some futures will not expire for years. Others are going to expire this month.
On the Chicago Mercantile Exchange, most, but not all futures contracts are listed on a 3-month cycle. That means, for example, there is a Canadian Dollar Future which expires in March, one which expires in June, one in September, and one in December.
On the Hong Kong Futures Exchange, there is a series of 12 contracts each year on the main HSI future contract.
On certain exchanges and for certain commodities, there is a 3-month cycle, but the exchange adds contracts for the nearest 2 months. Like for the HSI, you would have March, June, Sept and Dec. Since now it is August, you would be able to trade August, September, and December. The exchange will add an October contract when August expires. You would also be able to trade March 2008 and June 2008.|||As the two above said, the contract length on futures varies. If you are a farmer and know your wheat will be harvested in October, you may want to go in and sell wheat futures for October delivery. That way you know how much you will get for your wheat and you won't be nervous all summer watching wheat prices rise and fall.
Likewise, if you are a bakery, you know you will need a certain amount of wheat in October to make bread. You may want to go in and buy an October wheat future to lock in your price. That way you won't be nervous all summer watching wheat prices rise and fall.
Lastly, to the answerer here who said that options benefit the seller more than the buyer....absolutely wrong. What optionwriter is saying is that the option is mispriced...allowing benefit to the seller more than the buyer. I don't want to go into the math of options pricing theory, but it suffices to say that that sort of blanket statement is totally incorrect and worthy perhaps only of late night "get rich" TV. I also notice optionwriter offers a book for sale on covered call writing. If the theory is so good, why sell a book? Why not go run Harvard's Foundation of $30bb if you can make 25% a year? I personally know trading groups that would pay you TENS of millions to come and generate 25% per year in returns consistently. Why sell a book rather than actually making the 25%????
Well, because you can't make 25% consistently. Period.
To claim that options are mispriced shows either incredible ignorance or extraordinary hubris.|||Futures contract can be as short as one month to as long as one to three years. Futures is a contract that does not provide any advantages to either party (buyer or seller). However, if you are a options seller, you will receive cash (premium) just by entering into a contract. An options contract is an unequal contract because it benefits the seller more than the buyer.
You can earn consistently 25% investment income per year by just creating options. This investment method is called options writing. Go to www.optionswriter.net to find out more.
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